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

To: KC Jones who wrote (210)	5/18/1999 10:24:00 AM
From: StockPro	Respond to of 233

Fracmaster continues business Fracmaster Ltd FMA Shares issued 47,888,492 Apr 27 close $0.50 Mon 17 May 99 News Release Mr. Les Margetak reports Today, in the Court of Queen's Bench of Alberta, Judicial District of Calgary, the Honourable Madam Justice M.S. Paperny, granted the banking syndicate's application to lift the stay of proceedings under the Companies' Creditors Arrangement Act ("CCAA") and allow the banking syndicate to enforce their security. Accordingly, the court granted the order appointing Arthur Andersen Inc., ("Arthur Andersen") as receiver and manager of the present and future undertaking, property and assets of Fracmaster on certain terms and conditions. Arthur Andersen has been the court appointed monitor since the company sought and obtained a court order under CCAA. The receiver has been asked by the court to report back to it no later than May 21, 1999, as to its recommendations with respect to a sale of the company's assets. The applications of Fracmaster, Mr. Balm/Janus and Calfrac, previously filed with the court, were dismissed. Any other applications were adjourned and are to be dealt with by the receiver.

To: KC Jones who wrote (210)	5/18/1999 10:24:00 AM
From: CharlieChina	Read Replies (1) \| Respond to of 233

Judge forces Fracmaster into receivership Court rejects proposals, bidders must go back to drawing board for assets By IAN MCKINNON The Financial Post CALGARY - An Alberta judge yesterday rejected all three proposals for rescuing troubled Fracmaster Ltd. and appointed a receiver to oversee the sale of the assets of the Calgary-based energy services firm. In issuing her ruling, Justice Marina Paperny of the Court of Queen's Bench said each of the three proposals had unacceptable flaws. Fracmaster had sought refuge from its creditors in mid-March under the Companies' Creditors Arrangement Act after amassing debts of more than $134-million. Arthur Andersen Inc., the former monitor, appointed receiver to handle the sale, will return to court on Friday with recommendations on disposing of the assets, likely spelling the end of Fracmaster after more than 20 years of providing cementing, pressure pumping, and drilling services to the energy industry. Brian O'Leary, lawyer for Arthur Andersen, said the decision re-opens the auction, meaning new buyers can enter and previous bidders can alter old plans. "It's a whole new ball game now," he told reporters after the ruling was issued. "It is a pure asset sale. It is no longer a restructuring." But the various players were either tight-lipped or unavailable for comment about whether they would continue to pursue Fracmaster, which got into difficulty because of soft oil prices, unrest in Russia, and botched financing. The ruling negates a deal by UTI Energy Corp. of Houston, which had agreed to pay $60.7-million for Fracmaster in late April. The bid would have left Fracmaster's banking syndicate, owed $96-million, with a $35-million loss and nothing for unsecured debtors and common shareholders. UTI's deal was scheduled to close yesterday. While UTI's offer was supported by Fracmaster management and the banking syndicate, the sale did not fit the spirit of CCAA which calls for a restructuring that benefits all stakeholders, Judge Paperny said. "However reasonable the proposal may be, its purpose is to facilitate a sale for the benefit of the syndicate. That can be accomplished in a different fashion without distorting the spirit of the CCAA," she said. Mark Siegel, chairman of UTI, said quick resolution is crucial because staff and potential clients want to resolve the uncertainty surrounding Fracmaster. He declined to say if his firm will amend its bid. "We hope the receiver says Friday that there is a process in place and the process has come to an end and we are the winner. That's what we hope happens and that's what we expect will happen," he said. Judge Paperny found a $93.4-million proposal by Janus Corp., a company controlled by Alfred Balm, met the act's intent and provided the banks with slightly more money. It also gave unsecured debtors partial repayment and presented shareholders some opportunity for gain. The banks' concerns that the conditional deal might fall apart in three months, with the delay increasing their losses, were accepted by the court. While awaiting instructions from Geneva-based Mr. Balm, lawyer Phil Lalonde said he expects his client will make another pitch for assets of the company he once controlled. "We would put in a bid for the assets, but that doesn't mean Mr. Balm has given up in his desire to do something for the shareholders of Fracmaster," he said. Also still interested was Doug Ramsay, a former president of Fracmaster who entered Calfrac Ltd.'s last-minute proposal that was a small improvement over UTI in terms of benefits for unsecured creditors and shareholders. "I want to go caucus with our lawyer and the rest of the people and take a look at the company," he said outside the courtroom. "We wouldn't have come this far if we didn't think there was value in the company," Mr. Ramsay said. Judge Paperny said Calfrac's proposal failed to comply with CCAA's legislation and was not supported by the banking syndicate, led by Royal Bank of Canada. Mr. Balm took advantage of the bull market in the fall of 1997 to sell his 67% stake in the company via instalment receipts priced at $19.50. The shares climbed to almost $25 in early 1998. Last year's oil-price crash and unrest in Russia caused the stock to plummet, prompting many investors to walk away from their second payment of $9.75, due last September. The fall erased more than $1-billion of market capitalization in less than 12 months.