Connacher Oil and Gas lender forbearance agreement extended to May 16

By Caroline Salls

Pittsburgh, May 2 – Connacher Oil and Gas Ltd. entered into a second forbearance agreement with administrative agent Wilmington Trust, NA and some credit agreement lenders, according to a company news release.

Under the terms of a forbearance agreement that was entered into on March 31, the lenders agreed not to exercise their enforcement rights arising on account of the failure of Connacher to pay the cash interest and principal payments due on March 31 until the earlier of April 30, the occurrence of an event of default under the credit agreement that is unrelated to the failure to make the payment or the occurrence of a default or breach of representation under the forbearance agreement.

The second forbearance agreement extends the forbearance period until May 16.

Connacher said the failure to make the payments on the credit agreement within a 30-day grace period also constituted an event of default under its 12% convertible second-lien notes. The company said it continues to work with an informal committee of noteholders.

In addition, Connacher said it continues to investigate, evaluate and consider possible financing and restructuring alternatives. This process is being carried out by a special committee of the company’s board of directors.

Connacher is a Calgary, Alta.-based developer, producer and marketer of bitumen from oil sands.

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