Frac sand firm Vista Proppants and Logistics filed for Chapter 11 bankruptcy protection on Tuesday, stating it has around $500 million of liabilities, according to court documents.
The Fort Worth, Texas-based company said the unprecedented downturn in the oil and gas industry harmed its financial position.
“After thoroughly evaluating our options and strategic alternatives with our advisors and board of directors, we are confident that this is the best path forward for Vista and our stakeholders,” said Kristin Whitley Smith, Vista’s chief financial officer in a statement.
Smith said during the bankruptcy reorganization proceedings, Vista Proppants will continue with limited day-to-day operations “until an industry rebound.” Vista estimated it will emerge from Chapter 11 bankruptcy reorganization within 210 days.
The company’s biggest debt is a roughly $370 million secured term loan to Ares Capital Corporation.
Vista said it has lined up $11 million in financing from Ares, as well as other senior lenders, including MSD Partners LP and Angelo Gordon & Co., to keep operating.
The funds will cover costs and business operations during the restructuring, including meeting obligations to employees, vendors and other constituencies, according to the company.
“We will maintain ample liquidity and resources to support our business. We appreciate the continued, strong support demonstrated by our lenders, which should enable us to move quickly and smoothly through the restructuring process and emerge as a stronger long-term competitor,” Smith said.
Vista Proppants and Logistics is a supplier of frac sand to oil and gas drilling operations throughout Texas and Oklahoma. The company operates three mines in Texas, along with 12 transloading terminals in Texas and Oklahoma, three trucking facilities in Texas, and a fleet of 100 “last-mile” transport vehicles.
Two years ago the company listed 697 employees, but currently has 56 full-time employees after having recently furloughed most of its workers.
Vista still employs equipment operators, mechanics, supervisors, electricians and dispatchers. The company estimates its bi-weekly payroll is $297,000, according to court filings.
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