Covia seeks cover amid $1 billion debt

摘要

US sand giant Covia this week filed for Chapter 11 bankruptcy protection after negotiating a restructuring support agreement with most of its secured debt holders that would see more than $1 billion of debt and fixed costs wiped from its balance sheet. The company filed on Monday in the US Bankruptcy Court for the Southern District of Texas in Houston. The filing did not include its foreign subsidiaries in Canada, Mexico, or Denmark. US shale operators have been paring back their drilling plans in an effort to cut costs, with some producers electing not to drill any new wells and to curtail production instead. The move to reduce drilling has led to a decline in demand for oilfield services players, and in turn, proppant players, which were already facing softer demand for sand. "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," chief executive Richard Navarre said. Covia said it will continue operating in the US and added that it has cash reserves of around $250 million to continue funding operations, support its long-term investment programme, and manage throughout the reorganisation process.