Service & Supply | Oilfield Services | Financial Trouble | Capital Markets
Frac Sand Supplier Covia Files for Chapter 11 Bankruptcy
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Covia has filed for chapter 11 bankruptcy in an effort to reduce its debt burnden by $1 billion.
Covia's U.S. operations will also continue in the ordinary course of business serving customers. The Company's current cash reserves of approximately $250 million are expected to provide substantial liquidity to fund operations, support its long-term investment program, and manage the reorganization process.
Richard Navarre, Chairman, President and Chief Executive Officer, said: "The actions announced today are expected to significantly strengthen our balance sheet and improve our operating cash flow, making Covia an even stronger partner to our customers in both the near- and long-term. Following a careful and comprehensive review, the Board of Directors and management determined these actions are the best option to ensure the long-term success for Covia. We are pleased to have our lenders' support for our restructuring plan, which demonstrates their confidence in our ongoing operations. Their support of our plan should also allow us to complete this restructuring on an expedited timeframe.
"We have made important and substantial progress over the last year executing our strategy and aligning our business with changing market conditions, however, the negative impact of the pandemic and energy downturn has required this action. The reorganization process we began today serves as the means to a new beginning, and we expect the actions we have taken recently will enhance the competitive position of our high-quality assets for the future.
"We thank our customers for their support and also appreciate the continued cooperation of our business partners who play a key role in bringing our materials to market," he said. "We also thank our employees for their hard work and commitment to working safely and productively in the face of recent challenges. This gives me great confidence in our ability to continue to meet our customers' needs and successfully exit the process even stronger."
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