Connacher wins support for C$1 billion recapitalization plan

Tue Apr 21, 2015 4:37pm EDT
 
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CALGARY, Alberta (Reuters) - Connacher Oil & Gas Ltd, which operates a small oil sands project in northern Alberta, said on Tuesday it has won support for a C$1 billion ($814 million) debt-for-equity plan previously rejected by a Canadian court.

The company, which produces about 15,000 barrels per day from its Great Divide oil sands property, said its recapitalization plan now has the support of its shareholders and lenders. It intends to seek approval for the deal from the Alberta Court of Queen's Bench on Thursday.

The deal was blocked by the court earlier this month after some creditors balked at its terms. Connacher said it has restructured the terms of a loan facility to ensure approval of its recapitalization.

Connacher said the debt-for-equity exchange will cut its annual interest payments by C$80 million ($65.1 million) and see it issue $35 million in notes to raise cash for operations that have been squeezed by oil prices that have fallen by nearly half since June. Its existing shareholders will be left with a 2 percent stake in the company.

Connacher shares were unchanged at 1.5 Canadian cents on the Toronto Stock Exchange on Tuesday.

(Reporting by Scott Haggett; Editing by Ted Botha)