Frac sand supplier Covia files for Chapter 11 bankruptcy | Wis.Community

Frac sand supplier Covia files for Chapter 11 bankruptcy

July 1, 2020 - 12:21pm
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Frac sand supplier Covia has filed for Chapter 11 bankruptcy. In Wisconsin, Covia has facilities in Columbia, Dunn, Monroe, Pierce and Waupaca counties, including the only frac sand mine in Dunn. Covia has entered into a cost-reduction agreement with its secured creditors, and intends to reduce costs by $1 billion. Covia owns 32 mines, and is a result of the merger of Unimin and Fairmont Santrol. This news follows the recent news that frac sand supplier Hi-Crush, which also has facilities in Wisconsin, was declaring Chapter 11 protection.

In a press release, Covia noted the drop in sales caused by the COVID-19 pandemic and shocks throughout the energy industry.

“The actions announced today are expected to significantly strengthen our balance sheet and improve our operating cash flow, making Covia an even stronger partner to our customers in both the near- and long-term,” said Richard Navarre, Chairman, President and Chief Executive Officer. “Following a careful and comprehensive review, the Board of Directors and management determined these actions are the best option to ensure the long-term success for Covia. We are pleased to have our lenders’ support for our restructuring plan, which demonstrates their confidence in our ongoing operations. Their support of our plan should also allow us to complete this restructuring on an expedited timeframe.”

Mr. Navarre noted that the unprecedented backdrop from the COVID-19 pandemic and recent energy price shocks have significantly impacted the Company’s end markets and customers. “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,” said Mr. Navarre.

“The reorganization process we began today serves as the means to a new beginning, and we expect the actions we have taken recently will enhance the competitive position of our high-quality assets for the future.”

Attached Document

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