Tuscany International Drilling Inc., a Canadian oil-field services provider that operates in South America, sought U.S. bankruptcy protection from creditors, citing heavy competition and slow payments from customers.
The Calgary-based company listed assets and debt of as much as $500 million each in Chapter 11 papers filed yesterday in Wilmington, Delaware. A Houston-based affiliated holding company also filed for bankruptcy.
“Beginning in late 2012, the Tuscany entities began to experience significant revenue, cash flow and liquidity challenges, due in large part to low rig utilization” and overdue customer payments, Deryck Helkaa, the company’s chief restructuring officer, said in court papers.
Tuscany, with about 1,200 employees, owns 26 drilling rigs in Colombia, Brazil and Ecuador, he said. While Tuscany will continue operations, it may undertake a “marketing process” and consider “value-enhancing proposals,” Helkaa said.
The company in December sold its business in Africa and two rigs in Colombia to Etablissements Maurel & Prom SA. Maurel & Prom agreed to pay $23 million in cash and assume $50 million in Tuscany debt, selling all its Tuscany shares, according to a statement at the time.
Helkaa said in yesterday’s filing that the company will seek a judge’s permission to borrow $35 million to carry it through reorganization.
The case is In re Tuscany International Holdings (U.S.A.) Ltd, 14-10193, U.S. Bankruptcy Court, District of Delaware (Wilmington).