B&C is billing about $50,000 a day for the work
HOUSTON (Dow Jones)--Boots & Coots International Well Control Inc. (WEL), one
of two small firms involved in fighting oil-well fires in Iraq, said it paid off
the balance of a $1 million loan from Checkpoint Business Inc.
Jerry Winchester, chief executive of Boots & Coots, told Dow Jones Newswires
that the company on Friday paid a little more than $700,000 in principal and
interest on the $1 million loan facility provided by Checkpoint in December.
Checkpoint had proposed restructuring Boots & Coots through a Chapter 11
bankruptcy filing.
(This report and related background will be available on the Journal's Web
site, WSJ.com.)
Winchester said the company isn't currently considering bankruptcy as an
option. He said the company is focused on cutting costs and expanding the oil
well fire-prevention side of its business.
Boots & Coots, Houston, said on Jan. 31 that it was in default of the loan,
spurring speculation that Checkpoint would seek to wrest control of Boots &
Coots just as war in Iraq could bring salvation to the cash-strapped firm. He
declined to say who were the principal investors in Checkpoint, which is
incorporated in Panama, citing a confidentiality agreement.
Winchester said the company paid off the loan with revenue from first-quarter
operations, including work in Venezuela. He said the money didn't come from any
loans or payments from its contract to extinguish Iraqi oil-well fires, or from
its alliance partner Halliburton Co. (HAL), which owns 50,000 shares of
preferred stock in Boots & Coots.
Boots & Coots was one of two companies named last week as subcontractors to
work with general contractor Halliburton to fight oil-well fires. Winchester
said two teams of four or five Boots & Coots firefighters began work on Friday
on a handful of wells in southern Iraq. Boots & Coots is billing about $50,000 a
day for the work, Winchester confirmed.
Winchester said the repayment of the loan to Checkpoint is one step in
cleaning up Boots & Coots' balance sheet. The company still has $13.3 million in
debt, not including preferred stock. He said the company was exploring ways to
restructure the debt, including through consolidation. But he said the company's
heavy debt load wouldn't affect its ability to fight oil-well fires in Iraq.
"We are capable of responding not only to anything that happens in Iraq but to
our customers wherever they may be," Winchester said.
-By Alexei Barrionuevo, The Wall Street Journal
