Tuscany $70 million DIP loan, support agreement assumption approved

By Caroline Salls

Pittsburgh, March 21 - Tuscany International Drilling Inc. received court approval to assume its restructuring support agreement with its administrative agent and lenders and final approval of $70 million in debtor-in-possession financing, according to March 21 filings with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the DIP financing is expected to provide enough working capital to allow Tuscany subsidiaries to continue to operate in the normal course and meet their ongoing obligations during the company's restructuring process.

The company said it will enter into a fourth amended and restated senior secured guaranteed credit agreement with administrative agent Credit Suisse AG, Cayman Islands Branch and its various lenders.

Under the amended credit agreement, some of the lenders will provide a new $35 million DIP credit facility and roll up $35 million in pre-bankruptcy debt.

Interest on the DIP loan will be either Libor plus 800 basis points with a 2% Libor floor or the alternative Base rate plus 700 bps. Cash collateralized amounts will accrue interest at 5%.

The facility will mature on the earliest of 105 days after an amendment effective date, the effective date of a plan of reorganization and acceleration of the loans.

As previously reported, the terms of the company's restructuring plan include the following:

• A newly formed entity (NewCo) organized by some pre-bankruptcy lenders will credit bid a principal amount of their pre-bankruptcy credit facility claims or debtor-in-possession facility claims in exchange for all or substantially all of the holding company's assets;

• The DIP facility claims will be satisfied in cash equal to the amount of the claim;

• The holders of pre-bankruptcy credit agreement claims and/or DIP facility claims will have their claims partially satisfied through the credit bid, will be repaid in full and/or will have their claims refinanced or replaced by obligations of NewCo under any exit facility;

• Holders of general unsecured claims against the holding company and intercompany claims will receive no recovery;

• Holders of general unsecured claims against an affiliate debtor will be paid in full in cash;

• All old affiliate interests in the company's affiliate debtor will remain effective and be transferred to the proposed purchaser; and

• All old holding company interests will be cancelled on the plan effective date.

Tuscany, a Calgary, Alta.-based oilfield services provider, filed bankruptcy on Feb. 2. The Chapter 11 case number is 14-10193.

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