Connacher Oil and Gas gets court, creditor approval of restructuring

By Wendy Van Sickle

Columbus, Ohio, July 16 – Connacher Oil and Gas Ltd. received approval of the its plan of compromise and arrangement from the necessary majorities of affected creditors and the Court of Queen's Bench of Alberta in its proceedings under the Companies’ Creditors Arrangement Act, according to a news release.

The plan provides that the lenders under the company’s first-lien credit agreement dated May 23, 2014 will exchange a portion of the first-lien obligations owed to them for 100% of the equity interests in the company and new senior secured debt.

The resolution approving the plan pursuant to the CCAA was approved by 100% of both the first-lien lenders and the company's general unsecured creditors who were present and voted in person or by proxy at meetings held on June 19.

On July 16, the court entered an order sanctioning Connacher’s plan, which reflected certain voluntary amendments to address requests of the court. Those amendments are not materially prejudicial to the interests of any of the creditors under the plan, according to the release.

Connacher said it is now working toward satisfying conditions precedent to the plan and consummating the plan transaction.

In connection with Connacher’s application for the sanction of the plan, on June 27 the court granted an order extending the stay of proceedings under the CCAA until the earlier of Sept. 30 and, subject to the court sanctioning the plan, the filing of a certificate by the Court-appointed monitor, Ernst & Young Inc., confirming the implementation of the plan.

“The approval of the plan by affected creditors and subsequent court sanction of the plan, are key steps towards the company's implementation of the plan transaction and its emergence from protection under the CCAA,” Connacher said in the release.

“The plan represents the best alternative for the long-term interests of Connacher and significantly reduces its existing funded debt, improves liquidity, and is beneficial to employees, customers, suppliers and the communities where Connacher operates.”

In the event the plan cannot be implemented, the company will seek court approval to complete a pre-negotiated asset purchase transaction under which the first-lien agent, on behalf of the first-lien lenders, will cause a new company to be formed to execute a purchase and sale and agreement and credit bid a portion of the first-lien obligations for all or substantially all of the company’s property and assets.

Connacher is a Calgary, Alta.-based developer, producer and marketer of bitumen from oil sands. It made a CCAA filing on May 17, 2016.

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