TORONTO (miningweekly.com) – Heavy-oil exploration and development company Ivanhoe Energy would not appeal a decision by the Listing Qualifications Department of The Nasdaq Stock Market to delist the company’s shares on March 3, after Ivanhoe on Friday announced that it would file for creditor protection under the Bankruptcy and Insolvency Act (BIA), in Canada.

The company on Friday said the board had decided to file for bankruptcy owing to its current financial situation, saying that seeking protection under the BIA would be in the best interests of the company and all of its stakeholders.

The company had recently defaulted on paying the C$2.1-million interest on outstanding 5.75% convertible, unsecured, subordinated debentures held by The Bank of New York Mellon, which was due on December 31. The company, backed by mining legend Robert Friedland, had received a default notice last week for the C$73.3-million issue.

Executive co-chairperson Friedland had lent Ivanhoe Energy more than $5-million since October 2014.

“While under BIA protection, the company will continue with its efforts to pursue strategic alternatives, including restructuring its existing debt obligations and pursuing the sale of assets,” Ivanhoe Energy said.

The filing of the ‘Notice of Intention’ had the effect of imposing an automatic stay of proceedings (stay) that would protect the company and its assets from the claims of creditors and others while the company pursues this objective. The initial stay period of 30 days could be extended to a maximum six months, during which the company would assess its ability to present a viable proposal to its creditors.

The company said it continued to be actively engaged in discussions with various stakeholders to recapitalise the company. Strategic and financial alternatives under consideration were focused on relieving the financial burden of the company's current debt structure and obtaining additional financing to fund ongoing operations.

Should the company fail to present a viable proposal to its creditors within six months, it would become bankrupt.

The TSX had also suspended the company’s stock with immediate effect on Friday, pending a review.