Texas suitor urges Calfrac shareholders to reject management restructuring plan | iNFOnews | Thompson-Okanagan's News Source
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Texas suitor urges Calfrac shareholders to reject management restructuring plan

A pumpjack works at a well head on an oil and gas installation near Cremona, Alta., Saturday, Oct. 29, 2016. A Texas suitor for Calgary-based Calfrac Well Services Ltd. is urging shareholders to reject a management recapitalization proposal favoured by its senior debtholders. THE CANADIAN PRESS/Jeff McIntosh

CALGARY - A Texas suitor for Calgary-based Calfrac Well Services Ltd. is urging shareholders to reject a management recapitalization proposal favoured by its senior debtholders.

Wilks Brothers LLC says Calfrac's announcement on Monday that it will recommend stakeholders vote in favour of management's debt-for-shares proposal is "deeply troubling" as it promotes the interests of "self-selected" insiders and unsecured noteholders.

It says that if shareholders reject the management alternative when the matter is put to a vote on Sept. 17, the Wilks proposal — which it argues offers better recoveries for stakeholders and a stronger capital structure for Calfrac — will remain on the table.

Calfrac said Monday a special committee of its directors found the Texas bid lacks enough support to be successful, noting the original plan has the support of 78 per cent of holders of senior unsecured notes. It warned rejection could mean no recovery for shareholders.

Wilks Brothers has vowed to vote its block of just under 20 per cent of Calfrac's common shares against the plan, while Calfrac says at least 23 per cent of its shares held by insiders are to be voted in support of it.

The reorganization under the Canada Business Corporations Act must be supported by two-thirds of Calfrac's debtholders and shareholders to proceed.

In an earlier statement, Calfrac said Wilks Brothers, which owns U.S. competitor ProFrac Services Ltd., made two offers to buy Calfrac's U.S. business in June. Both were refused.

This report by The Canadian Press was first published Aug. 18, 2020.

Companies in this story: (TSX:CFW)

News from © The Canadian Press, 2020
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