Houston company buys troubled
Fracmaster
CALGARY, May 21 (Reuters) - BJ Services Co. (NYSE:BJS -
news) of Houston swooped in on Friday to become the surprise
victor in the race to own insolvent Canadian oil service firm
Fracmaster Ltd. (Toronto:FMA.TO - news), outpacing two rivals
with the richest offer.
BJ's winning C$80-million bid for Calgary-based Fracmaster -- which had not been made known
previously -- was favoured by Fracmaster's receiver after a sealed bid process. It also was
approved by an Alberta judge.
''It's the duty of the receiver to get the best possible price for all parties,'' Justice Marina Paperny of
the Court of Queen's Bench, said in her decision.
''I find the receiver has acted properly throughout.''
The bid by BJ, a major international oil services concern that entered Canada in 1996 by taking over
Nowsco Well Service, eclipsed others by UTI Energy Corp. (AMEX:UTI - news), also of
Houston, and Calgary-based Calfrac Ltd., a new company led by former Fracmaster president
Doug Ramsay.
Former Fracmaster chairman Alfred Balm, still a major shareholder of the company, withdrew his
plans to bid for Fracmaster late on Wednesday and backed Calfrac.
UTI's bid was initially approved by Fracmaster's board and secured creditors when the company
won bankruptcy protection in April. But Calfrac and Balm launched their proposals shortly before
Alberta Judge Marina Paperny was expected to rule on the plan.
Early this week, Paperny rejected all three bids for the company and appointed the accounting firm
Arthur Andersen as receiver to direct another auction process.
Fracmaster provides high-tech oil field pumping services in North America, but is best known for its
oil-production joint ventures in Russia.
The company's fortunes sank with the Russian economy and oil industry downturn. It won protection
from creditors in March when it became clear its plunging revenues would force it to miss debt
payments.
The company had already undergone two auctions since last September when the Geneva-based
Balm started efforts to recoup C$170-million in losses he suffered when a host of investors defaulted
on the final installment for shares he sold a year earlier.
Oilmaster |
