GasFrac Energy Services Inc.
TSX : GFS

GasFrac Energy Services Inc.

March 03, 2015 06:00 ET

GASFRAC Announces Agreement for the Sale of Substantially All Operating Assets and Related Technology and CCAA Update

CALGARY, ALBERTA--(Marketwired - March 3, 2015) - GASFRAC Energy Services Inc. (TSX:GFS) ("GASFRAC" or the "Corporation") announces today that GASFRAC has entered into a definitive asset purchase agreement in respect of the sale of substantially all of its assets and related technology to a third party oil and natural gas service industry purchaser (the "Sale Transaction"). The Sale Transaction resulted from the previously announced court-approved sale and investment solicitation process ("SISP") conducted within the Companies Creditor's Arrangement Act ("CCAA") and Chapter 15 of the United States Bankruptcy Code ("Chapter 15") proceedings, under the supervision of Ernst & Young Inc., the court appointed monitor ("Monitor") and the Special Committee of the Corporation. Until the Sale Transaction is completed, GASFRAC will continue to operate its business under the supervision of its board of directors and the Monitor.

The Sale Transaction is subject to the approval of the Alberta Court of the Queen's Bench and United States Bankruptcy Court (collectively, the "Courts"). GAFRAC expects to file an application with the Courts to obtain the required approvals along with a report filed by the Monitor, which is anticipated to support completion of the Sale Transaction. Additional terms of the Sale Transaction will be disclosed as the Sale Transaction progresses, applicable approvals are obtained and the Sales Transaction is completed. Subject to approvals from the Courts, the Sale Transaction is expected to be completed in early April, 2015.

Concurrently with completing the Sales Transaction, GASFRAC will continue to develop a court-approved process to settle all claims identified as part of the CCAA and Chapter 15 proceedings.

GASFRAC has also obtained an extension until April 3, 2015, of its forbearance agreement with its primary secured lender, PNC Bank Canada Branch ("PNC"). Under the forbearance agreement, PNC has agreed, subject to certain conditions and restrictions, to forbear from exercising remedies under the existing secured loan documents between PNC, GASFRAC and GASFRAC's subsidiaries until April 3, 2015 or a date on which an event of default under the forbearance agreement occurs.

The Corporation also announces that, in accordance with the provisions of the court order under the CCAA process, no interest payments have been made to holders of the unsecured subordinated debentures that were due on February 27, 2015.

The Corporation also announces that, because its board of directors now consists of the same members as the Special Committee (all of which are independent for the purposes of the Sale Transaction), the Corporation has merged the duties of the Special Committee with that of the board of directors.

Leigh Cassidy, Chairman stated that, "GASFRAC, with the assistance of its employees and professional advisors and under the supervision of the Special Committee and the Monitor, believes it has conducted an effective and transparent competitive sales process. The board of directors is of the view that this Sale Transaction represents the best outcome for GASFRAC given current circumstances."

CIBC World Markets Inc. acted as agent, investment banker and financial advisor to GASFRAC with respect to the SISP and the Sale Transaction. Borden Ladner Gervais LLP is Canadian legal counsel to GASFRAC and Vinson & Elkins LLP is United States counsel to GASFRAC. The Monitor's Canadian counsel is Norton Rose Canada LLP and United States counsel is Norton Rose Fulbright US LLP.

Further news releases will be provided on an ongoing basis throughout the CCAA process as may be determined necessary.

This news release contains certain statements that constitute forward-looking statements under applicable securities legislation. All statements other than statements of historical fact are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", or the negative of these terms or other comparable terminology. These statements are only as of the date of this document and the Corporation does not undertake to publicly update these forward-looking statements except in accordance with applicable securities laws. Forward-looking statements, including but without limitation, statements concerning the implementation of CCAA proceedings, completion of the Sale Transaction and the reorganization or restructuring of the assets, business and financial affairs of the Corporation, are based on current expectations, estimates, projections and assumptions, which the Corporation believes are reasonable but which may prove to be incorrect and therefore such forward-looking statements should not be unduly relied upon. In addition, the Sale Transaction is subject to standard closing conditions, including that all required regulatory, court and creditor approvals are obtained and there is no assurance that the Sale Transaction will be completed. The forward-looking statements included herein involve known and unknown risks, uncertainties which may cause actual results or performance to be materially different from any future results or performance expressed or implied herein.

These risks, uncertainties and other factors relating to the Corporation include, but are not limited to, the level of indebtedness of the Corporation, the implementation and impact of the Sale Transaction in respect of the reorganization or restructuring of the assets, business and financial affairs of the Corporation, future co-operation of the creditors of the Corporation including the Corporation's secured lender, receipt of all required approvals to implement the Sale Transaction, the Corporation's ability to generate sufficient cash-flow from operations or to obtain adequate financing to fund capital expenditures and working capital needs and to meet the Corporation's ongoing obligations during the CCAA process, the ability to maintain relationships with suppliers, customers, employees, stockholders and other third parties in light of the Corporation's current liquidity situation and the CCAA proceedings, as well as other general assumptions regarding, among other things: industry activity; the general stability of the economic and political environment; effect of market conditions on demand for the Corporation's products and services; the ability to obtain qualified staff, equipment and services in a timely and cost efficient manner; the ability to operate its business in a safe, efficient and effective manner; the performance and characteristics of various business segments; the effect of current plans; the timing and costs of capital expenditures; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding environmental matters in the jurisdictions in which the Corporation operates; and the ability of the Corporation to successfully market its products and services.

In addition, actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors set forth under the section entitled "Business Risks" in the Corporation's MD&A filed on SEDAR.

Contact Information

  • Requests for shareholder information should be directed to:
    GASFRAC Energy Services Inc.
    403-817 2739
    investors@gasfrac.com