CALGARY, ALBERTA--(Marketwired - April 11, 2014) - Tuscany International Drilling Inc. ("Tuscany" or the "Company") announces the execution of a definitive agreement by its wholly-owned subsidiares, Tuscany Rig Leasing S.A. and Tuscany Perfurações Brasil Ltda., with respect to the sale of heli-portable drilling rigs 115 and 116 located in Brazil, including all related equipment owned or used by Tuscany in connection with the rigs (the "Transaction"). The aggregate consideration payable to Tuscany pursuant to the Transaction is USD $29,000,000, USD $6,000,000 of which has been deposited into escrow.
The proceeds from the completion of the Transaction will be used by Tuscany to reduce its indebtedness under its secured credit facility.
The Transaction is subject to customary closing conditions. The Transaction is expected to be completed in mid-May.
For information on developments concerning and documents relating to the Company's previously announced proceedings under Chapter 11 of the United States Bankruptcy Code, please refer to the website of Prime Clerk LLC, the administrative advisor, at http://cases.primeclerk.com/tuscany/.
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 natural gas operators in South America. Tuscany has operating centers in Colombia, Brazil and Ecuador.
Statements in this news release contain forward-looking information including, without limitation, statements with respect to the closing of the Transaction and the timing thereof, Tuscany's anticipated use of proceeds from the Transaction, Tuscany's strategic alternatives, the restructuring of the assets and liabilities of the Company and the future financial position and focus 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: (i) Tuscany's ability to complete the Transaction; Tuscany's level of indebtedness and the acceleration of such indebtedness; Tuscany's ability to complete a strategic restructuring and refinancing transaction or alternative transaction, Tuscany's ability to negotiate and execute definitive documentation with respect to the restructuring (including Tuscany's ability to complete a new debtor-in-possession credit facility and new replacement senior secured credit facility) and obtain bankruptcy court approval thereof; (ii) the effects of the commencement of the Companies' Creditors Arrangement Act and United States Bankruptcy Code proceedings on Tuscany and the interests of various creditors, equity holders and other constituents; (iii) bankruptcy court rulings and the outcomes of the proceedings in general; (iv) the length of time Tuscany will operate under the proceedings; (v) risks associated with third party motions in the proceedings, which may interfere with Tuscany's ability to consummate Tuscany's restructuring plan; (vi) the potential adverse effects of the proceedings on Tuscany's liquidity or results of operations; (vii) Tuscany's ability to execute its business and restructuring plan;
(viii) increased legal and other costs related to the proceedings; (ix) Tuscany's ability to maintain contracts that are critical to its operation and to obtain and maintain normal terms and relationships with its suppliers, other service providers, customers, employees, stockholders and other third parties; (x) Tuscany's ability to retain key executives, managers and employees; (xi) Tuscany's ability to generate sufficient cash flow from operations or obtain adequate financing to fund its capital expenditures and meet working capital needs and its ability to continue as a going concern during the restructuring; (xii) the volatility of Tuscany's stock price; (xiii) the availability of capital on economic terms to fund Tuscany's significant capital expenditures and acquisitions; (xiv) Tuscany's ability to obtain adequate financing to pursue other business opportunities; (xv) regulatory and environmental risks associated with exploration, drilling and production activities; (xvi) the adverse effects of changes in applicable tax, environmental and other regulatory legislation; (xvii) a deterioration in the demand for Tuscany's products; (xviii) the risks and uncertainties inherent in estimating future revenues and the timing of expenditures; (xix) intense competition with companies with greater access to capital and staffing resources; (xx) the risks of conducting operations in foreign jurisdictions and the impact of pricing differentials, fluctuations in foreign currency exchange rates and political developments on the financial results of Tuscany's operations; and (xxi) other risks as described in reports that the Company files with securities regulators. Any of these factors could cause the Company's actual results and plans to differ materially from those in the forward-looking statements. 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.