Lightstream to file CCAA case after noteholder settlement talks fail

By Caroline Salls

Pittsburgh, Sept. 19 – Lightstream Resources Ltd. said it will initiate proceedings under the Companies’ Creditors Arrangement Act on Sept. 26 after it was unable to reach a settlement of litigation filed by the holders of its 8 5/8% unsecured notes due Feb. 1, 2020.

According to a company news release, the restructuring support agreement between Lightstream and an informal committee of holders of its 9 7/8% second-lien secured notes due 2019 required a settlement to be reached by Sept. 16.

Since no settlement was reached by the deadline, the company is required to discontinue its proposed plan of arrangement under the Canada Business Corporations Act, begin CCAA proceedings and seek an initial order under the CCAA for the purposes of implementing a sale transaction by way of a credit bid by the secured noteholders.

Lightstream said the CCAA case will be filed in the Court of Queen’s Bench of Alberta.

The company said it expects a stay prohibiting any noteholders from terminating, making any demand, accelerating, amending or declaring in default or taking any enforcement steps will be supplemented and replaced by a broad CCAA stay of proceedings.

The company said trading of Lightstream securities on the Toronto Stock Exchange has been halted and is expected to be suspended indefinitely. Lightstream said the Toronto Stock Exchange is expected to begin delisting review proceedings on an expedited basis.

In addition, Lightstream said it entered into a second forbearance agreement with administrative agent Toronto-Dominion Bank and other lenders under which they will not exercise cross-default rights on the company’s revolving credit facility under Dec. 16.

As previously reported, Lightstream began a sale and investment solicitation process in July, and it anticipates that the court will approve the continuation of that process under the CCAA proceedings.

The launch of the CCAA sale proceeding is not expected to affect normal course business operations, the release said. The company said it has cash on hand and is continuing to pay all service providers, suppliers, contractors and employees.

Because of the CCAA filing, Lightstream said it will not hold the special noteholder meetings that were scheduled for Sept. 30 for voting on the CBCA plan of arrangement.

The meeting of holders of Lightstream’s common shares will still be held as planned on Sept. 30 to conduct the required annual meeting matters, including the election of directors and appointment of auditors.

Lightstream is an oil and gas exploration and production company based in Calgary, Alta.

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