Canacol Gets Lifeline from Bondholders Amid Restructuring Effort
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Canacol Energy Ltd., Colombia’s largest gas producer, reached an agreement with a group of bondholders that will provide the company with much needed financing as it works to restructure its debt.Author of the article:You can save this article by registering for free here. Or sign-in if you have an account.(Bloomberg) — Canacol Energy Ltd., Colombia’s largest gas producer, reached an agreement with a group of bondholders that will provide the company with much needed financing as it works to restructure its debt. Subscribe now to read the latest news in your city and across Canada.Subscribe now to read the latest news in your city and across Canada.Create an account or sign in to continue with your reading experience.Create an account or sign in to continue with your reading experience.The ad hoc group of holders of its unsecured dollar notes due in 2028 will provide up to $67 million of debtor-in-possession financing, according to a statement Wednesday. In return, the lenders get a court-ordered super priority charge over the Canadian company’s assets, meaning they will get paid ahead of other creditors.The new financing includes a $45 million delayed-draw new-money term loan, plus an additional commitment to issue up to $22 million in letters of credit to renew or replace existing ones. The loan is set to mature in June 30, 2026.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.“The amount provided is reasonable if Canacol can sustain production at or above” the terms of its long-term supply contracts, said Cristian Fera, an analyst at KNG Securities. Still, “we would have welcomed a strategic player providing DIP instead of the bondholders.”The company has been in talks for a such a deal ever since it filed for creditor protection in Canada on Nov. 18, just days before it was due to make a payment on its bonds. Canacol needed to make a deal fast as it was running out of cash to sustain operations, with production in steady decline ever since it lost a major supply contract in 2023. Apart from $500 million in dollar bonds, the firm has an outstanding credit line with Macquarie. It also has a revolving credit facility with a syndicated group of banks that expires in 2027. Some analysts say that the best chances of recovery would come from a potential acquisition. So far, only Colombia’s state-owned oil company Ecopetrol has publicly disclosed being in talks with Canacol, but the details haven’t been made public.Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.365 Bloor Street East, Toronto, Ontario, M4W 3L4© 2025 Financial Post, a division of Postmedia Network Inc. All rights reserved. Unauthorized distribution, transmission or republication strictly prohibited.This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.You can manage saved articles in your account.and save up to 100 articles!You can manage your saved articles in your account and clicking the X located at the bottom right of the article.