Pacific Exploration & Production Corp said an Ontario court approved a US$500 million debtor-in-possession financing facility for the Canadian company and its units, hours after it filed for creditor protection.
The Ontario Superior Court of Justice also approved a US$134 million letter-of-credit facility and second-priority lien over assets under the facility, Pacific Exploration said on Wednesday.
The company said earlier in the day that it had filed for protection from creditors under the Companies’ Creditors Arrangement Act, an insolvency law in Canada that allows companies to restructure their finances and stay in business.
Pacific Exploration said it also plans to file for protection under Chapter 15 in the United States.
Chapter 15 of the U.S. Bankruptcy Code protects a foreign company from creditors looking to seize its assets in the country.
Pacific Exploration reached a deal last week with creditors, including Canadian private equity firm Catalyst Capital Group, to convert almost all of its debt to equity after it missed an interest payment due in March.
Pacific Exploration, formerly called Pacific Rubiales Energy Corp, has been hurt badly by the prolonged slump in oil prices.
The Toronto Stock Exchange suspended trading of the company’s shares last week.
Until then, the stock had lost 65 percent of its value since December 17, when Pacific Exploration said lenders had formed a committee to negotiate the terms of a credit agreement.
(Reporting by Arathy S Nair in Bengaluru; Editing by Saumyadeb Chakrabarty and Kirti Pandey)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)
Photo courtesy of Reuters/Jose Miguel Gomez