Hurricane Hydrocarbons Ltd. (Hurricane) filed its Fourth Amended and Restated Plan of Compromise and Arrangement (Plan) with the Alberta Court of Queen’s Bench on February 15, 2000 in its long running dispute with the company’s bondholders, who are owed approximately US$180 million. The new plan was scheduled to be put to creditors of the company on February 24, 2000.
The most recent plan has been amended to provide for a $18.7 million “sweetener” payment, an increase in the interest rates payable on the bonds to 16 per cent, and full repayment of the principal amount if the bondholders agree to the proposal. To help finance the plan, Hurricane has entered into an agreement with a Canadian underwriter to sell 9.3 million special warrants exercisable into common shares, the sales of which is expected to raise approximately US$25 million.
Hurricane, which is engaged in the acquisition, exploration, development and production of oil, primarily in the Republic of Kazakhstan, has been sheltered from its creditors by the Companies’ Creditors Arrangement Act since May 1999, after the company ran into chronic liquidity problems. The protection has been extended at least six times, with the latest running until February 25, 2000.
John Laskin and Tony DeMarinis of Torys are lead counsel for the bondholders in the proceedings. Other firms involved are: Blake, Cassels & Graydon LLP; Burnet, Duckworth & Palmer; Burstall Ward; Fraser Milner; Gowling, Strathy & Henderson; Macleod Dixon; and McCarthy Tétrault.