CALGARY, ALBERTA--(Marketwired - Dec. 23, 2013) - Tuscany International Drilling Inc. ("Tuscany" or the "Company") (TSX:TID)(COLOMBIA:TIDC) announces that it has closed its previously announced disposition of its Africa business unit to Etablissements Maurel & Prom ("M&P") (the "Transaction") pursuant to which, through the acquisition of the issued and outstanding shares of Caroil SAS ("Caroil"), a wholly-owned subsidiary of Tuscany (the "Caroil Sale"), M&P indirectly acquired Tuscany's business operations in Africa which was primarily comprised of 9 drilling and workover rigs, associated inventory and related drilling contracts and obligations in respect of the French branch office of Caroil. Caroil's business operations in Colombia, including 6 drilling and workover rigs, associated inventory and related drilling contracts, have been transferred to a wholly-owned subsidiary of Tuscany.
The aggregate consideration paid by M&P to Tuscany under the Transaction was comprised of: (i) the assumption by M&P of U.S.$50.0 million of debt under Tuscany's syndicated credit facility; and (ii) the transfer of 109 million shares of Tuscany ("Tuscany Shares") held by M&P to a special purpose vehicle. The Tuscany Shares will either: (i) be sold to third-party purchasers with the proceeds of such sales directed toward the repayment of indebtedness under Tuscany's credit facility; and/or (ii) returned to Tuscany for cancellation at a later date.
Concurrent with the closing of the Transaction, Tuscany announces that it has restructured its senior secured loans and entered into the third amended and restated credit agreement ("Credit Agreement"). The principal purpose of the restructuring of the senior secured loans was to allow M&P to assume U.S.$50.0 million of Tuscany's senior secured loans as part of the consideration for the Transaction. Pursuant to the Credit Agreement, Tuscany and its lenders have also agreed to: (i) defer all December 15, 2013 payment obligations of Tuscany to January 24, 2014; (ii) defer financial ratios to January 24, 2014; (iii) convert revolving loans to term loans with a maturity date of September 14, 2015; and (iv) remove Caroil as a guarantor of the loans.
The closing of the Transaction and the restructuring of its senior secured loans allows Tuscany to refocus on its existing operations in Colombia, Brazil and Ecuador. Tuscany's fleet is now comprised of 14 rigs in Colombia, 9 rigs in Brazil and 5 rigs in Ecuador.
Tuscany anticipates that it will complete the previously announced sale of two Colombian rigs to M&P and a separate press release will be disseminated by Tuscany upon completion of such sale.
Tuscany, a corporation headquartered in Calgary, Alberta, is engaged in the business of providing contract drilling and work-over services along with equipment rentals to the oil and gas industry. Tuscany is currently focused on providing services to oil and gas operators in South America. Tuscany has operating centres in Colombia, Brazil, Ecuador.
Statements in this news release contain forward-looking information including, without limitation, statements with respect to the completion of the sale of rigs to M&P, and the future financial position of the Company. Readers are cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Tuscany. These risks include, but are not limited to: counterparty completion risks, regulatory approval risk, the risks associated with the oil and gas industry, commodity prices and exchange rate changes, regulatory changes, successful exploitation and integration of technology, customer acceptance of technology, changes in drilling activity and general global economic, political and business conditions. Industry related risks could include, but are not limited to; operational risks, delays or changes in plans, health and safety risks and the uncertainty of estimates and projections of costs and expenses and access to capital. The risks outlined above should not be construed as exhaustive. The reader is cautioned not to place undue reliance on this forward-looking information. Tuscany does not undertake any obligation to update or revise any forward-looking statements except as expressly required by applicable securities laws.
The Toronto Stock Exchange has not reviewed, nor does it accept responsibility for the adequacy or accuracy of this release.
The listing of Tuscany's common shares on the Colombian Stock Exchange does not imply a certification by the BVC of the value or the solvency of Tuscany.