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Microcap & Penny Stocks : FMA / FracMaster -- Ignore unavailable to you. Want to Upgrade?

To: oilmaster who wrote (229)	6/8/1999 12:37:00 PM
From: Richard Saunders	Read Replies (1) \| Respond to of 233

more of the same - Calgary Herald Tuesday 8 June 1999 Court rejects bids to overturn Fracmaster sale to BJ Takeover expected to close this month Chris Varcoe, Calgary Herald The strange saga of Fracmaster Ltd. ended with a whimper, not a bang, on Monday as Alberta's highest court removed a hurdle blocking the company's sale to a rival. The Alberta Court of Appeal rejected four separate appeals clouding the future of the insolvent oil services company, paving the way for Fracmaster to be acquired by BJ Services Ltd. of Houston. It's expected the takeover will close this month once regulatory approval is gained. Observers expect the sale will lead to layoffs at the company's Calgary headquarters and the end of the 23-year-old Fracmaster name from the Canadian oilpatch. "The Fracmaster company will have no ongoing business," company lawyer Brian Davison said after the court hearing. "The technology and expertise it has will join BJ Services." Monday's decision ended weeks of legal wrangling for the company, which began in mid-March when the corporation sought court protection from its creditors. Owing more than $130 million, the company was put on the auction block under the Companies' Creditors Arrangement Act after previous attempts to find a buyer failed last fall. A deal was struck in April to sell Fracmaster's assets to UTI Energy Corp. of Houston for $60 million. But the agreement wasn't approved by the court after several new bidders -- Calfrac Ltd. and a group headed by former Fracmaster chairman Alfred Balm -- emerged to make last-minute pitches. In a second tender process ran last month, BJ Services submitted the top offer of $80 million and Justice Marina Paperny of the Court of Queen's Bench approved the deal. UTI, Calfrac and the Balm group promptly appealed, leading to a lengthy court hearing Friday that spilled over to Monday. In delivering the unanimous appeal court ruling, Justice Adelle Fruman rejected the appeals, noting the company's "inevitable insolvency" last spring gave rise to a hurried attempt to sell Fracmaster -- but the lower court did not act unreasonably in the process. Former Fracmaster president Doug Ramsay, who headed the Calfrac group, lamented the demise of the former corporate success story. Founded in 1976, Fracmaster rose to great heights providing cementing, acidizing, fracturing and well services to the oilpatch. It moved into the former Soviet Union a decade ago, where it still provides oil-well stimulation and drilling services But the currency crisis in Russia last August and the downturn in world oil prices crippled the company. Worth more than a billion dollars on the Toronto Stock Exchange a little more than one year ago, Fracmaster will wind up owing creditors tens of millions of dollars. Shareholders will get nothing from its sale. "I was in the company in the early days and we built a great company, but we are sad it's going to be going into the hands of non-Canadians," Ramsay added. The final chapter on Fracmaster hasn't been finished just yet. The deal won't close until BJ Services obtains approval from the federal Competitions Bureau, which is reviewing the takeover. BJ Services has extensive operations in Canada through Nowsco Well Services Ltd. , a rival to Fracmaster. Nowsco has about 600 employees, while Fracmaster has about 630 in Canada and around the world. Fracmaster president Les Margetak said the mood at the company's head office has been anxious. "We needed an answer and we got one today," he said after the appeal. "It's closure and that was what the company was really requiring."