Canacol Energy Seeks Creditor Protection to Pursue Restructuring

Executive Summary

• Canacol Energy Ltd. has filed for creditor protection under the Canada Business Corporations Act’s Companies’ Creditors Arrangement Act (CCAA) and is seeking an Initial Order from the Court of King’s Bench of Alberta.
• The filing cites a looming liquidity crisis driven by upcoming debt payments, a $22 million adverse arbitration award, reduced natural‑gas production, and rising trade/payables balances.
• KPMG Inc. will be appointed as monitor; the board and management will remain in place, but the company expects delisting review on the TSX and other exchanges.

Key Details

• Proceedings: Application for an Initial Order under CCAA to obtain a stay of creditor actions and appoint KPMG Inc. as monitor.
• Liquidity Issues: Anticipated inability to meet interest and principal payments on funded debt; $22 M arbitration liability against subsidiaries; declining gas output; increased trade and other payables.
• Court Involvement: Order sought from the Court of King’s Bench of Alberta; monitoring and reporting will be overseen by KPMG.
• Cross‑Border Recognition: Company intends to seek recognition of the CCAA order in the United States under Chapter 15 bankruptcy provisions and in Colombia under applicable restructuring law (Law 1116 of 2006).
• Governance: Board of Directors remains unchanged; management continues day‑to‑day operations under monitor oversight.
• Exchange Impact: Anticipated delisting review by the Toronto Stock Exchange and other listed venues; no assurance of continued listing eligibility.
• Additional Resources: Further information available on the monitor’s website: https://kpmg.com/ca/canacol

Notable Quotes

(No direct quotes provided in the release.)