Hyduke Energy Services Inc. Announces Repayment of Operating Line, New Credit Facility, Subsidiary Bankruptcy and Update on Strategic Initiatives
NISKU, AB, Dec. 5, 2018 /CNW/ - Hyduke Energy Services Inc. ("Hyduke" or the "Company") (HYD – TSX) wishes to report on the following matters:
Repayment of Operating Line and New Credit Facility
Hyduke announces that it has entered into a 12-month secured credit facility with Pillar Capital Corp. for CDN $1,500,000 (the "Credit Facility") and has received confirmation on the repayment in full of its operating line and has satisfied all outstanding conditions with the National Bank of Canada.
The Credit Facility is secured by certain assets of the Company (some registered in second position) with the guarantors being the Company and each of its wholly owned subsidiaries. The Credit Facility bears interest at 1.75% per month on daily balances outstanding and payments will be made monthly, with the first three months to be interest payments drawn from an interest reserve account that has been established from an advance on the Credit Facility. Thereafter, monthly principal and interest payments shall be made by the Company, with a balloon payment due at the end of the term. The loan and security agreements and corresponding closing documents have been completed.
Western Manufacturing Ltd. Bankruptcy Proceedings
On November 21, 2018, Western Manufacturing Ltd. ("Western"), a wholly-owned subsidiary of Hyduke, made an assignment into bankruptcy for the general benefit of creditors pursuant to the provisions of the Bankruptcy and Insolvency Act ("BIA") and Deloitte Restructuring Inc. ("Deloitte") was named Licensed Insolvency Trustee ("Trustee").
Update on Strategic Alternatives
The Board and management of Hyduke wish to report that they have been extensively seeking, reviewing and pursuing strategic alternatives, including: significant reductions in overhead expenditures, negotiations with suppliers, building on existing and investigating new business development activities, sale of non-core assets and partnerships with financing firms, in an effort to stabilize the Company and improve the Company's near-term and longer-term outlooks. The Company has entered into agreements to sell two of its auxiliary buildings in Nisku, AB for a total of $4.5 Million. Both sales are scheduled to close prior to January 15, 2019, subject to standard terms and conditions being satisfied in a timely fashion.
Forward looking information
This news release contains forward-looking information relating to the expectations of the Company regarding a credit facility with a new lender as well as financial and operational matters and strategic initiatives. Such forward-looking information is subject to important risks, uncertainties and assumptions. The results of events predicated in this forward-looking information may differ materially from actual results or events. As a result, you are cautioned not to place undue reliance on this forward-looking information.
While the Company may elect to, the Company is under no obligation and does not undertake to update this information at any particular time, except as required by law.
About Hyduke
Trading on the TSX under the symbol "HYD," Hyduke Energy Services Inc. is a supplier of equipment and services to the oil and gas drilling and well servicing industry.
SOURCE Hyduke Energy Services Inc.
Pat Ross, President and CEO, Tel (780) 955-0355 or Nick Cristiano, CFO, Tel (780) 955-0355
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