CALGARY and TULSA, OK, Nov. 9, 2015 /CNW/ - This morning,
Parallel Energy Trust (the "Trust") and its affiliated entities,
Parallel Energy Commercial Trust and Parallel Energy
Inc. (collectively, the "Canadian Parallel Entities") filed an
application for protection under the Companies' Creditors
Arrangement Act (the "CCAA") with the Alberta Court of Queen's Bench in Calgary (the "Canadian Court").
Contemporaneously with the Canadian Parallel Entities' CCAA filing,
the Trust's wholly owned U.S. based subsidiaries, Parallel Energy
LP and Parallel Energy GP LLC (the "U.S. Parallel Entities") each
filed voluntary petitions for relief under Chapter 11 of Title 11
of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court of
Delaware (the "Bankruptcy
Court").
The Trust also announces that the U.S. Parallel Entities have
reached an agreement for the sale of substantially all of the U.S.
Parallel Entities' assets for USD$110
million as part of the Chapter 11 filings to Scout Energy
Group II, LP as a "stalking horse" bidder, subject to applicable
sale and bid procedures to be approved by the Bankruptcy Court as
part of a sale in the Chapter 11 process. The applications for CCAA
and Chapter 11 creditor protection are part of a larger strategy to
obtain a stay of certain creditor claims while the U.S. Parallel
Entities conduct the sales process.
In connection with the Canadian Parallel Entities' and U.S.
Parallel Entities' (collectively, "Parallel") CCAA and Chapter 11
filings, respectively, Parallel has entered into a Restructuring
Support Agreement with Parallel's existing lending syndicate,
whereby Parallel's existing lenders have agreed to support the CCAA
and Chapter 11 filings and the sales process.
Parallel has received commitments from its existing lending
syndicate for CDN$2 million for the
Canadian process and USD$9.4 million
for the U.S. process, in "debtor in possession" financing to
support its continued operation, both of which are subject to
approval by the Canadian Court and the Bankruptcy Court,
respectively. Upon approval by both courts, the financing, combined
with cash generated from ongoing operations, will provide
sufficient liquidity to support the business during the
proceedings.
As part of the CCAA proceedings, the Canadian Parallel Entities
are seeking the appointment of KPMG Inc. as monitor (the "Monitor)
to oversee and monitor the Canadian Parallel Entities' affairs
while the sales process is conducted in the Chapter 11 filings.
The U.S. Parallel Entities have filed various motions with the
Bankruptcy Court which will allow them to continue their
post-petition business operations in the ordinary course, including
requesting Bankruptcy Court approval to continue honouring employee
obligations, including wages, without interruption.
Evercore Group, L.L.C. has been retained by Parallel as its
investment banker and Alvarez & Marsal North America LLC has
been retained by Parallel as its financial advisor.
Additional information regarding the CCAA proceedings will be
available on the Monitor's website at
http://www.kpmg.ca/parallelenergy. Bankruptcy Court filings and
other information related to the Chapter 11 filings are available
at a website administered by the U.S. Parallel Entities' noticing
agent, Prime Clerk, at http://cases.primeclerk.com/parallel.
ABOUT PARALLEL ENERGY TRUST
Parallel's assets and operations are located in the
Mid-Continent Region of the United
States and its portfolio consists of mature, liquids-rich
natural gas assets. The Trust's common units are traded on the
Toronto Stock Exchange (the "TSX") under the symbol "PLT.UN" and
the Trust's debentures are traded on the TSX under the symbol
"PLT.DB".
Additional information about Parallel can be found on the
Trust's website at www.parallelenergy.ca or in Parallel's annual
information form, available on SEDAR at www.sedar.com.
ADVISORIES
Forward-Looking Information
This news release contains forward-looking information including
statements regarding the Trust's anticipated future strategies, the
CCAA proceedings, the Chapter 11 filings and the sales process.
Such forward-looking statements speak only as of the date of this
document and are based on Parallel's current expectations and
assumptions in light of information available to it at the time the
statements are made. The statements involve substantial known and
unknown risks and uncertainties, most of which are beyond the
control of Parallel, including, without limitation, the decisions
of the courts' in Canada and
the United States, the financial
condition and market capitalization of the Trust, commodity price
levels, retention of key personnel, whether the sales process will
result in an acceptable transaction of any form and what
arrangements Parallel's existing lenders may agree to, whether the
sales process will result in proceeds which exceed the senior
indebtedness owed to Parallel's existing lending syndicate, in
addition to those risks and uncertainties listed under "Risk
Factors" in Parallel's annual information form dated March 19, 2015 (the "AIF"). Parallel cautions
investors in Parallel's securities that the assumptions used in the
preparation of the forward-looking statements, although considered
reasonable at the time of preparation, may prove to be imprecise
and important risk factors discussed above cast significant doubt
on Parallel's ability to continue as a going concern. Actual
results, performance or achievements may differ materially from
those projected in any forward-looking statements. As such, undue
reliance should not be placed on the forward-looking statements. No
assurance can be given that the sales process will result in
proceeds in excess of the senior indebtedness owed to Parallel's
existing lending syndicate or that the expectations set out in this
news release will transpire in the manner expressed in, or implied
by, these forward-looking statements or if any of them do
transpire, what benefits Parallel or its securityholders will
derive therefrom. Unless required by law, Parallel does not assume
any obligation to update or revise the forward-looking statements,
whether as a result of new information, future events or
circumstances or otherwise. The forward-looking statements are
expressly qualified by these cautionary statements.
SOURCE Parallel Energy Trust