CALGARY, May 16, 2016 /CNW/ – Connacher Oil and Gas Limited (CLC – TSX; “Connacher” or the “Company”) announces that it is initiating proceedings today at the Court of Queen’s Bench of Alberta to seek creditor protection under the Companies’ Creditors Arrangement Act (“CCAA”).
As a result of, among other things, the current depressed prices for oil and Connacher’s limited ability to access capital markets, and after careful consideration of all other available alternatives, the Special Committee of the Board of Directors of the Company determined that it was in the best interests of the Company and its stakeholders to apply for creditor protection under the CCAA.
Subject to CCAA Court approval and execution of definitive documents, the Company has received commitments from certain of its existing lenders for up to US$20 million in interim financing to support its continued operations. The interim financing is expected to provide sufficient liquidity to support the business of the Company during the CCAA proceedings. As part of the CCAA application, Connacher will seek approval of the appointment of Ernst & Young Inc. as the Monitor to oversee the CCAA proceedings and report to the Court.
During the CCAA proceedings, it is expected that every day obligations to employees, key suppliers of goods and services and the Company’s customers will, after the filing date, continue to be met. While under CCAA protection, management of the Company will remain responsible for the day-to-day operations of the Company under the general oversight of the Monitor. At this time, there are no intended changes to the management team or the composition of the Board of Directors of the Company and the Company anticipates that such individuals will continue in their respective roles throughout the CCAA process.
The Company intends to seek approval to initiate a sale and investment solicitation process (“SISP”) to be conducted in conjunction with the CCAA proceedings, intended to generate interest in the business and/or the assets of the Company, with the goal of maximizing value for all stakeholders of the Company.
Further news releases will be provided on an ongoing basis throughout the CCAA process as may be determined necessary.