CALGARY – Struggling junior oilsands producer Southern Pacific Resources Corp. said Tuesday that it will miss an interest payment on its debts, which was due Wednesday.
Less than a month after the Calgary-based company announced it was weighing its options, including the outright sale of the heavily indebted company, it said it would not pay $5 million in a cash interest payment on its 6% unsecured, subordinated debt.
The move triggers a 30-day window, or “cure period,” for the company to pay up before it defaults.
“The recent drop in oil prices and limited growth in production levels have been primary considerations in not making this payment,” Southern Pacific said in a press release. Instead, the company said it would focus on its review of “strategic alternatives,” which could include the outright sale of the company, its assets or the restructuring of its debt.
That debt includes a $172.5 million loan due on June 30, 2016, for which the $5 million interest payment is due Dec. 31.
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