February 4, 2022
Vertex Downhole Ltd., a Calgary, Alberta-based integrated oil and gas service company, filed an NOI on February 4. The company primarily designs, develops, sells and rents drilling and other downhole tools for use in the oil and gas exploration industry. It has three wholly-owned US subsidiaries and employs 28 individuals in Canada and seven individuals in the US. The COVID-19 pandemic and the resulting global decline in oil and gas prices and exploration activities and disruptions in the supply chain resulted in increased liquidity risk to the company, challenged its ability to enter into customer contracts in a timely manner and negatively impacted the company’s business and operational results. On January 26, HSBC, the company’s largest secured creditor, issued a demand under section 244 of the BIA. As the company was unable to negotiate an agreement with HSBC prior to the expiry of the 10-day notice period, it determined that an NOI filing was necessary to restructure the business. On March 4, the company was granted permission to conduct a SISP. Grant Thornton was initially the proposal trustee, but was replaced by MNP to build consensus between the company and HSBC by giving effect to HSBC’s desire that MNP act as proposal trustee. Counsel is Burnet, Duckworth & Palmer for the company, Faskens for HSBC, Cassels for Grant Thornton, and Dentons for MNP.
By Dina Milivojevic