Hyduke Energy Services Inc. announces subsidiary filing an NOI proposal under the BIA, updates on building sales, repayment of secured debt and strategic initiatives
NISKU, AB, Feb. 22, 2019 /CNW/ - Hyduke Energy Services Inc. ("Hyduke" or the "Company") (HYD – TSX) wishes to report on the following matters:
B.W. Rig Supply Inc. Notice of Intention to Make a Proposal Under the BIA
On February 8, 2019, B.W. Rig Supply Inc. ("B.W. Rig"), a wholly-owned subsidiary of Hyduke, has filed with the Office of the Superintendent of Bankruptcy a Notice of Intention to Make a Proposal ("Notice of Intention") pursuant to the provisions of Part III of the Bankruptcy and Insolvency Act (Canada) (the "BIA") and Deloitte Restructuring Inc. has been appointed as the trustee in the proposal proceedings and will assist B.W. Rig in its restructuring efforts.
The filing of the Notice of Intention has the effect of imposing an automatic 30-day stay of proceedings that will protect B.W. Rig and its assets from the claims of creditors while B.W. Rig pursues its restructuring efforts. This 30-day period may be extended with the authorization of the Court of Queen's Bench of Alberta. B.W. Rig is not currently in a position to meet the obligations owing to its secured and unsecured creditors and as such, has taken this action under the BIA as the most expeditious and economical manner of addressing the interests of its creditors and allowing it to carry on its operations.
Hyduke will provide further updates as to B.W. Rig's next steps of the process when these have been determined.
Update on Sale of Buildings and Strategic Initiatives
Further to its press release of December 5, 2018, the Board and management of Hyduke wish to report that the Company has completed the sale of two of its auxiliary buildings in Nisku, AB. The majority of the net proceeds from the sale of the buildings have been used to repay in full the outstanding secured credit facility with Pillar Capital Corp and to make a partial payment toward the Company's secured loan with the Business Development Bank of Canada.
In Q1 2019, the Company has begun to restructure its business in an effort to achieve a future cash flow positive operation, with a focus on fewer existing operating divisions and diversifying its client and service bases beyond the oilfield and into new industries, such as infrastructure, agriculture, forestry and equipment rental and potentially diversifying geographically, into the United States.
Forward looking information
This news release contains forward-looking information relating to one of the Company's wholly-owned subsidiaries proceeding with filing a Notice of Intention to make a proposal pursuant to the Bankruptcy and Insolvency Act (Canada), selling two buildings, secured debt repayments and restructuring Hyduke's operations. The use of any of the words "if", "will", "continue" and similar expressions are intended to identify forward-looking statements. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this document.
The forward-looking statements included in this document are not guarantees of future performance and should not be unduly relied upon. Forward-looking statements are based on current expectations, estimates and projections that involve a number of factors and risks, which could cause actual results to differ materially from those anticipated and described in the forward-looking statements. These factors and risks include, but are not limited to:
- the ability of the Company to identify strategic alternatives;
- the demand for the Company's services;
- volatility in commodity prices, in particular for oil and natural gas; and
- general economic conditions including the capital and credit markets.
The Company cautions that the foregoing list of assumptions, risks and uncertainties is not exhaustive. The forward-looking statements contained in this press release speak only as of the date of this press release. As a result, you are cautioned not to place undue reliance on this forward-looking information. For a full discussion of the Company's material risk factors, see Hyduke's annual information form for the year ended December 31, 2017, under the heading "Risk Factors" which is accessible through the SEDAR website (www.sedar.com).
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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