CALGARY — A Texas-based competitor that is also an investor and debtholder in struggling Calfrac Well Services Ltd. has put forward a recapitalization plan it says is superior to one the Calgary-based company announced three weeks ago.
Wilks Brothers, LLC, says its offer would significantly lower Calfrac’s debt level and give a better recovery to stakeholders by providing more consideration for a smaller equity stake.
It charges the plan advanced by management would result in a high debt levels, inferior recoveries and would “unfairly enrich certain key insiders” in the company.
In a previous news release, Calfrac said Wilks Brothers, which owns U.S. competitor ProFrac Services Ltd., made two offers to buy Calfrac’s U.S. business in June. Both were refused.
Wilks Brothers owns just under 20 per cent of Calfrac’s common shares.
Both Calfrac and ProFrac offer oilfield services including hydraulic fracturing, where chemicals and liquids are injected at high pressure into underground formations to break up tight rock and allow trapped oil and gas to flow into the well.
This report by The Canadian Press was first published Aug. 4, 2020.
Companies in this story: (TSX:CFW)
The Canadian Press