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Ivanhoe Energy executive chairman Carlos Cabrera. Image courtesy of ivanhoeenergycom/Youtube.

Canadian oil sands developer Ivanhoe Energy filed for bankruptcy protection Friday and halted trading of its stock as it struggles to meet debt obligations amid slumping oil prices.

The British Colombia-based company was unable to make a $1.7 million debt payment and received a default notice last week for a $58 million debt note, Reuters said.

The company’s founder Robert Friedland has lent Ivanhoe $2.18 million since last October.

Ivanhoe has six months of protection from creditors to restructure its business under the terms of Canada’s Bankruptcy and Insolvency Act.

It the company can not restructure its operations or find new financing sources during the six month period it will be decalred bankrupt.

The company had $61.3 million in long-term debt as of the third quarter of 2014.

Trading of Ivanhoe shares on the Toronto Stock Exchange has been stopped.

The shares closed at 69 cents, or 87 Canadian cents, last Thursday.

“The company continues to be actively engaged in discussions with various stakeholders to recapitalize the company. Strategic and financial alternatives under consideration are focused on relieving the financial burden of the company’s current debt structure and obtaining additional financing necessary to fund ongoing operations,” Ivanhoe said.