Trading Symbols: "EGD:TSX.V | EGDFF:US"
VANCOUVER, Sept. 16, 2019 /CNW/ - Energold Drilling
Corp. ("Energold" or "the Company") and its
wholly-owned Canadian subsidiaries, Bertram Drilling Corp.,
Cros-Man Direct Underground Ltd., EGD Services and Omniterra
International Drilling Inc. (collectively the "Canadian
Companies") today announced that the Canadian Companies have
initiated proceedings at the Supreme Court of British Colombia (the
"Court") to seek creditor protection under the Companies'
Creditors Arrangement Act ("CCAA"). Energold's
non-Canadian operating entities - including Energold de
Mexico, S.A. de C.V., through
which Energold operates its Mexican and Latin American business
units, Energold Drilling Limited (UK), through which Energold
operates its English, Middle-East,
European, and African business units, and Bertram Drilling Inc,
through which Energold operates its US business unit, are not
subject to the CCAA proceedings and are not expected to be impacted
by CCAA proceedings.
The filing for CCAA protection was made after careful
consideration of the Company's strategic alternatives, and was made
with the support of the Company's primary secured creditor, a
syndicate of noteholders pursuant to a convertible note agreement
dated June 15, 2017 (each a
"Noteholder"), represented by Extract Advisors LLC
("Extract" or the "Agent") as administrative agent
for the Noteholders. The Company expects that the CCAA proceedings,
and contemplated sales process, will enable it to preserve value
for stakeholders. The Company's interim management and financial
advisor is Portage Point Partners and the Court has appointed FTI
Consulting Canada Inc. as Monitor of the Company during this
process.
All operations of Energold, the Canadian Companies, as well as
the non-Canadian operating entities will continue uninterrupted in
the ordinary course of business and every day obligations to
employees, key suppliers of goods and services, and the Company's
customers will, after the filing date, continue to be met on an
ongoing basis.
In addition, Energold has entered into a binding working capital
facility agreement ("WC Facility") of C$3.7 million from Downtown Capital Partners LLC,
("DCP") one of the Noteholders, to provide liquidity to support its
continued operations during the CCAA proceedings. The WC Facility
demonstrates the strong support of the Noteholders for the Company
during the restructuring process. The Company's management,
including the Chief Restructuring Officer, will remain responsible
for day-to-day operations under the general oversight of the
Monitor. "The restructuring plan includes reducing the Company's
debt load, cutting costs in our corporate office, completing the
sale of Dando Drilling International, selling non-core assets and
refocusing attention to the remaining operating units. We are
particularly bullish on the minerals divisions, where we will be
using the new C$3.7million credit
facility to invest in the ramp up of new projects. We are open for
business and, after several lean years in our industry, now have
sufficient liquidity to position ourselves to grow as we meet the
resurgent demand for our drilling services that accompanies the
dramatic rise in precious metals prices we have seen in 2019," said
Mark Berger of Portage Point
Partners, Energold's Chief Restructuring Officer.
"I am excited by the strong support shown by the Noteholders as
demonstrated by DCP's provision of the C$3.7
million WC Facility, which has provided us with the working
capital we need to continue the dramatic rise in rig utilization we
have experienced over the past four months. As we ramp back
up to address the rebound in drilling activity, we will continue to
provide our customers with the highest standard of service," said
Marco Garrido, Director of Sales of
Energold's Mexico division.
"We are pleased with the Noteholders' commitment as we continue
to work through the recovery in the drilling market globally, but
particularly in West Africa," said
Richard Thomas, Managing Director of
Energold's EMEA division.
With the consent of the Noteholders, the Company has also
obtained court approval to initiate a sale process to be conducted
in conjunction with the CCAA proceedings, intended to permit
interested parties to pursue the purchase of the business units and
assets of the Company with the goal of maximizing value for all
stakeholders of the Company. The sales process was developed in
consultation with the Company's financial advisor, Ernst &
Young Orenda Corporate Finance Inc. and the Monitor and has the
support of the Agent and the majority of its Noteholders. As part
of the sale process, Extract, as agent on behalf of the
Noteholders, has submitted bids for each of Energold's key business
units, including its Mexican and EMEA operations.
The Company also announced it has signed an auction agreement
with Century Services Corp. for the sale of the assets of Bertram
Drilling Corp. The Court has approved this agreement, and the
Company will conclude the transaction as soon as possible. It is
expected that the auction agreement will yield proceeds of at least
C$4.8 million.
ABOUT ENERGOLD DRILLING
Energold is a leading global specialty drilling company that
services the mining, energy, infrastructure, geothermal, water and
manufacturing sectors in 25 countries. Specializing in a socially
and environmentally sensitive approach to drilling, Energold
provides a comprehensive range of drilling services from
early-stage exploration to onsite operations.
On behalf of the Directors of Energold Drilling Corp.,
"Frederick W. Davidson"
President, CEO
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Cautionary Note Regarding Forward-Looking
Statements:
Some statements in this news release contain forward-looking
information. These statements include, but are not limited to,
statements with respect to proposed activities, work programs and
future expenditures. These statements address future events and
conditions and, as such, involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by
the statements. Such factors include, among others, the effects of
general economic conditions, a reduction in the demand for the
Company's drilling services, the price of commodities, changing
foreign exchange rates, actions by government authorities, the
failure to find economically viable acquisition targets, title
matters, environmental matters, reliance on key personnel, the
ability for operational and other reasons to complete proposed
activities and work programs, the need for additional financing and
the timing and amount of expenditures. Energold Drilling Corp. does
not assume the obligation to update any forward-looking
statement.
SOURCE Energold Drilling Group