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Silhouette of oil pump jack (hanhanpeggy/Getty Images/iStockphoto)

Twin Butte headed for receivership after takeover rejected Add to ...

Twin Butte Energy Ltd is set to be shopped around through a receivership ‎after its debt holders rejected a proposed takeover bid, leaving the company with few options as it sought ways to repay lenders.

A banking syndicate led by National Bank Financial is forcing the move ‎after holders of Twin Butte's debentures voted overwhelmingly on Monday to reject the takeover bid by Hong Kong-based Reignwood Resources Holding Pte. Ltd.‎ The company has about $223-million in bank debt. The move could come within a day or two, a source with direct knowledge of the matter said.

Related: Bondholders cry foul over Twin Butte Energy’s planned sale

Earlier Monday, only 32 per cent of the debt holders voted in favour of the deal at a meeting in Calgary, with the majority arguing that the offer, at just 14 cents on the dollar, vastly undervalued their securities. It needed two-thirds support to pass. 

Calgary-based Twin Butte had earlier warned that debenture and equity holders could be left with nothing if the Reignwood bid were rejected and the company were forced into receivership.

The suitor had offered $21.3-million for the shares, drawing support from 78 per cent of the unit holders on Monday. The debt holders had argued that they were entitled to more money as a senior security class.

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