Canadian heavy hauler ENTREC filed for chapter 15 bankruptcy in the US
Story by:at FreightWaves.com
Heavy hauler ENTREC is seeking additional financing to continue operating as it pursues buyers or investors while under creditor protection in Canada and Chapter 15 bankruptcy in the United States.
ENTREC will ask a judge in Alberta today to allow it to borrow up to C$30 million (about US$21.5 million) and to approve its plans to market its Canadian and U.S. trucking and crane businesses, according to a court filing. The company intends to appoint Ernest and Young in Canada and Sequoia in the U.S. as its sales agents.
The filing suggested that the interim financing would come from a syndicate led by Wells Fargo. ENTREC filed for creditor protection after the lenders demanded immediate repayment of C$90 million (about US$65 million).
The company intends to keep its Canadian and U.S. businesses in operation during the sale process, which it hopes to finalize by early August. The company disclosed that it temporarily laid off five employees that it had deemed nonessential. The company employs about 230 in Canada and 140 in the U.S.
ENTREC filed for creditor protection on May 14 under Canada’s Companies’ Creditors Arrangement Act, similar to a U.S. Chapter 11 bankruptcy. The Alberta-based company also filed for Chapter 15 bankruptcy in the U.S.
ENTREC’s core businesses consist of Alberta-based Capstan Hauling and ENT Oilfield Group, and Texas-based ENTREC Cranes & Heavy Haul. The company has a fleet of 115 tractors and 125 cranes and picker trucks.
ENTREC specializes in moving oversized and overweight loads. Much of its business comes from Canada’s energy sector, already plagued before COVID-19 and a collapse in oil prices.
“COVID-19 has reality killed demand in industries like oil and mining,” Peter Stefanovich, managing partner at LeftLane Associates, a transportation and logistics mergers and acquisitions advisory firm. “Even if there’s a temporary reprieve, you have equipment that is very capitally intensive to maintain and operate.”
Since the start of 2020, ENTREC has sold off millions of dollars in assets and equipment while restructuring the business. Much of the efforts involved its crane services operations, court filings show.
As of May 15, the company had reduced its long-term debt to C$95.3 million from C$130.9 million at the end of the year, court filings show.
ENTREC listed the book value of its properties and equipment at C$87.4 million. Its leased equipment is worth about C$38.3 million, according to a court filing.
ENTREC CEO John Stevens did not respond to a voicemail left by FreightWaves seeking comment.
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Source of original story and credits: freightwaves