Tuscany Begins Restructuring; Credit Suisse is DIP Agent
Tuscany International Drilling announced it and one of its subsidiaries, Tuscany International Holdings Ltd., commenced proceedings under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware to implement a restructuring of the company’s debt obligations and capital structure through a plan of reorganization.
Credit Suisse AG with affiliates, other banks financial institutions and lenders are acting collectively as the DIP lenders, according to a court document filed February 2, 2104. A proposed $35 million DIP credit facility is expected to provide the company with sufficient working capital to allow its subsidiaries to continue to operate in the normal course and meet their ongoing obligations over the course of the restructuring.
The company and Tuscany USA also intend to commence ancillary proceedings in the Court of Queen’s Bench of Alberta under the companies’ Creditors Arrangement Act (CCAA) to seek recognition of the Chapter 11 Proceedings and certain related relief. The Chapter 11 proceedings and the CCAA proceedings will provide for a stay of proceedings against the company and Tuscany USA. Other than Tuscany USA, none of the company’s other subsidiaries are parties to the Chapter 11 Proceedings or the CCAA proceedings.
The company and the lenders agreed, subject to the terms of the support agreement, to pursue a balance sheet restructuring. The agreement contemplates a bidding and marketing process to seek strategic alternatives that in accordance with bid procedures to be approved by the U.S. court is intended to maximize value for stakeholders.
During the restructuring proceedings, the company expects to continue with its day-to-day operations, and employee obligations and any trade payables incurred are expected to be paid or satisfied in the ordinary course. The DIP facility, together with current cash balances of and anticipated cash-flow from operations, are expected to provide sufficient liquidity to the Company through the restructuring period.
Trading the company’s common stock on the Toronto Stock Exchange and the Colombian Stock Exchange has been halted, and the company anticipates that the trading halt will remain in effect pending delisting of the common stock. The company expects to complete the restructuring during the second quarter of 2014.
Calgary, Alberta-headquartered Tuscany provides contract drilling and work-over services along with equipment rentals to the oil and gas industry.