Twin Butte Energy Ltd TBTEF

Twin Butte story in Financial Post Aug 31st

[talladega73]

CALGARY Twin Butte Energy Ltd. is the latest oil and gas company to file for bankruptcy after it failed this week to secure enough investor support for a deal that would have sold the company to a Chinese firm. Despite an alternative proposal from a group of debenture holders, Twin Butte announced after markets closed Tuesday evening that its lenders and secured creditors had forced it to seek Bankruptcy Insolvency Act (BIA) protection and demanded repayment of $205 million. Twin Butte directors had warned investors earlier this month that the company would be forced into receivership if they didnt approve the companys sale to Hong Kong-based Reignwood Resources Holding Pte Ltd. There is a real possibility that Twin Butte will be placed into receivership if the arrangement is not completed, and in the current commodity price environment, we are advised that it is extremely unlikely that any offers will materialize in a receivership process that will provide any value to the debentureholders (sic) or shareholders of Twin Butte, director Jim Brown said in an Aug. 4 release. Those concerns were proven true after markets closed Tuesday. Twin Butte, which did not respond to a request for comment, said it would waive the BIAs 10-day notice period and seek bankruptcy protection immediately a move that is expected to anger at least one group of debenture holders. That group of creditors, calling itself the Ad Hoc Group, had asked Twin Butte to file for protection under the Companies Creditors Arrangement Act (CCAA) rather than under the BIA and rather than accepting the takeover offer from Reignwood. Reignwood had offered to pay six cents for each Twin Butte share valuing the companys equity at $21 million and $140 for every $1,000 principal amount of the companys debentures. More than three quarters of Twin Buttes shareholders voted in favour of the deal but the agreement failed to also get the required two-thirds support of the companys debenture holders so the deal collapsed. The offer reflected the long fall in the companys share price following the collapse in oil prices in the middle of 2014. In April of that year, Twin Butte shares traded for $2.43, but the company struggled to generate cash and to pay interest on its debts as commodity prices collapsed and remained depressed. The Ad Hoc Group issued a release within one hour of Twin Buttes announcement Tuesday night, saying that said their plan would allow Twin Butte to emerge from CCAA creditor protection with significantly reduced leverage and material interest savings. Representatives of the group did not respond to a request for comment Wednesday on how they would proceed given that Twin Butte planned to seek bankruptcy protection immediately. Twin Butte also announced Tuesday that the Toronto Stock Exchange had deemed it was not in compliance with the exchanges listing requirements. Regardless, the company said the receivership application would result in Twin Buttes shares being delisted. Financial Post [e-mail]