Sanjel financing order OK’d in U.S.; stay against creditors instituted

By Sheri Kasprzak

New York, April 6 – Sanjel Corp. received interim U.S. court approval of a Canadian court order approving a post-petition credit facility and obtained a temporary restraining order, preventing creditors from taking legal action while the Chapter 15 case is pending, according to an order from the U.S. Bankruptcy Court for the Western District of Texas San Antonio Division.

Accessing the $50 million interim facility through an existing 12-member banking syndicate is “warranted under the circumstances, is in the best interest of the debtors, and is a sound exercise of the Chapter 15 debtors’ business judgment,” the court filing said.

The debtors might not be able to access a post-petition facility under terms as favorable as those provided under this facility, the court noted.

A final hearing on the DIP loan recognition is scheduled for April 26.

Additionally, the court granted a temporary restraining order, barring creditors from pursuing legal action against Sanjel until the Chapter 15 case is established.

As previously reported, Sanjel filed a Companies’ Creditors Arrangement Act case in the Court of Queen’s Bench of Alberta to facilitate the closing of two sales of its North American pressure pumping providers.

Sanjel signed a definitive agreement to sell its Canadian fracturing, coiled tubing and cementing assets to STEP Energy Services Ltd., an ARC Financial Corp.-sponsored company. Concurrent with this agreement, the company signed an agreement for the sale of its United State fracturing, coiled tubing and cementing assets to Liberty Oilfield Services.

The company expects to operate uninterrupted throughout the CCAA process until the transactions are closed.

The company failed to make the $11.25 million interest payment due Dec. 21 on its 7½% callable bond issue 2014/2019 and breached financial covenants under its senior secured revolving credit agreement and the bond agreement.

Based in Calgary, Alta., Sanjel is a global energy services company. Its Chapter 15 case number is 16-50778.

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