ALBERTA

Lone Pine announces restructuring deal with noteholders, TSX suspends trading

09/25/2013 04:07 EDT | Updated 11/25/2013 05:12 EST
CALGARY - Lone Pine Resources Inc. (TSX:LPR) said Wednesday that it has reached an agreement on a restructuring plan with holders of about three quarters of its outstanding senior notes.

If successfully implemented, the Calgary-based oil and natural gas developer said the plan would reduce its debt obligations and improve access to capital.

"The proposed restructuring transaction is the result of a lengthy evaluation and deliberation by Lone Pine's management and board of directors, together with its financial and legal advisers, on a range of alternatives available to the company," said CEO Tim Granger.

"The proposed restructuring is designed to significantly reduce the company's long-term debt and improve its liquidity, which will allow Lone Pine to resume investment in its attractive asset base while at the same time allowing the company to retain its relationships with its current employees, industry partners and suppliers."

Lone Pine also says it has commenced court proceedings in the U.S. and Canada to obtain protection from creditors.

Meanwhile, the Toronto Stock Exchange has suspended trading in Lone Pine while it reviews whether the company meets listing requirements.

Under the restructuring, all outstanding common shares of Lone Pine will be cancelled, senior notes will be converted to new common equity and a new equity investment of US$100 million by holders of senior notes will be made through a private offering.

On August 15, Lone Pine said it failed to make a US$10.1-million, semi-annual interest payment on its senior secured notes.

The company, incorporated in Delaware and headquartered in Calgary, said failure to make the payment would result in default on the 10.375 per cent senior notes maturing in 2017 unless remedied within 30 days.

It said such a default would allow the trustee or holders of at least 25 per cent of the US$195 million in aggregate principal amount to declare the notes immediately due and payable with accrued interest.

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