Cano Petroleum misses loan payment, won't redeem series D preferreds

By Caroline Salls

Pittsburgh, Sept. 2 - Cano Petroleum, Inc. failed to make a $130,579 interest payment due Aug. 31 on its amended and restated credit agreement, according to an 8-K filed with the Securities and Exchange Commission.

The missed payment constitutes an event of default under the amended credit agreement and the company's subordinated credit agreement. The defaults allow the lenders to accelerate payments on the loans.

As a result of these and other previous defaults, the company said it will not redeem its series D convertible preferred stock on Sept. 6 as provided for in the certificate of designations.

According to the 8-K, the subordination provisions in the certificate of designations prohibit Cano from redeeming the stock while it is in default under the amended credit agreement.

Cano is a Fort Worth-based oil and natural gas company.

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