Canacol Energy (TSX: CNE) has managed to secure debtor-in-possession financing, following the company making a filing under the Companies Creditors Arrangement Act in late November. The financing comes from an ad hoc group of holders of the firms 5.75% senior secured notes due 2028.
The lenders have agreed to provide a US$45 million delayed-draw new-money term loan, with the ability to expand that loan for an additional $22.0 million in the form of letters of credit that can be used to renew or replace certain existing letters of credit. The funding bears “customary” DIP interest and fees, and is set to mature June 30, 2026.
READ: Canacol Energy Files For Creditor Protection As Debt Comes Due
The funding is to be used to fund ongoing operations along with restructuring costs., as approved by the DIP lenders. Initial funding of US$15 million is to be made available upon the Court of King’s Bench of Alberta approving the entry of a DIP approval. The second tranche, at US$30 million, will be made available upon Canacol obtaining a Colombian recognition order of the bankruptcy proceedings.
The funding remains subject to court approval, and is expected to be used in support of a sale and investment solicitation process.
Canacol remains halted on the TSX.
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