Heavy equipment hauler ENTREC has secured creditor protection in Canada and is seeking U.S. bankruptcy, blaming the COVID-19 pandemic and the collapse in oil prices.
The Canadian company filed for protection under Canada’s Companies’ Creditors Arrangement Act (CCAA), similar to U.S. Chapter 11 bankruptcy, on May 15. The filing came after Wells Fargo demanded immediate repayment of nearly C$90 million (about US$65 million).
The company blamed COVID-19 and the collapse in oil prices for its recent struggles.
“The COVID-19 global pandemic, a historic decrease in oil demand and the Russia-OPEC oil price war are all factors which have contributed to ENTREC’s financial challenges,” the company said in a court filing.
ENTREC specializes in the transportation of oversized and overweight cargo, and providing cranes in the energy, mining, chemical, pulp and paper, and infrastructure industries. The company has a fleet of 115 tractors and 550 trailers with operations in Alberta, Colorado, North Dakota, Texas and Wyoming.
The company plans to continue operations as it looks to sell all or parts of its business. ENTREC reported C$284 million in assets and C$271 million in liabilities.
ENTREC’s U.S. subsidiary obtained US$3.9 million in forgivable loans in April under the Paycheck Protection Program in the U.S. The company also applied for the Canada Emergency Wage Subsidy, which covers up to $847 per week per employee.
The company’s struggles pre-dated COVID-19. The downturn in the energy sector, pipeline delays, and carbon taxes had been weighing on its profitability, ENTREC said in a filing.