TXCO receives notice of acceleration for repayment of all bank debt

By Sara Rosenberg

New York, April 22 - TXCO Resources Inc. received a notice of acceleration from Bank of Montreal, the administrative agent on its credit facility, of all amounts due, according to an 8-K filed with the Securities and Exchange Commission on Wednesday.

As of March 31, there was an outstanding balance under a facility of about $50 million and an outstanding balance under a term loan of around $100 million.

The acceleration notice, received on April 21, demands immediate payment of all the outstanding amounts, plus all interest accrued.

The company said that it does not have sufficient funds to repay the amounts and so far has not been successful in its negotiations with the lenders regarding the extension of the payment or in securing alternative sources of financing.

As a result, the lenders could, if they choose to, seek to foreclose on substantially all of the company's assets, which are pledged as collateral to secure the bank debt, and, in response, the company could seek relief through a bankruptcy filing.

TXCO is a San Antonio, Texas-based energy company.

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