Opti Canada, a Calgary-based junior oilsands company, has filed for creditor protection as part of a restructuring that has its creditors agreeing to a debt-for-equity swap.

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Opti and Nexen's Long Lake oilsands project south of Fort McMurray. ((CBC))

Opti filed in Alberta's Court of Queen's Bench on Wednesday to implement the restructuring, which the firm said would "materially improve the company's total leverage and liquidity."

The restructuring provides for the conversion of all secured notes into common equity in the form of new common shares of Opti. Secured creditors will invest $375 million into the company.

Holders of Opti's existing common shares will be issued warrants to acquire new common shares of the company. All of Opti's existing common shares will be cancelled.

Opti's TSX-listed shares last traded Tuesday at 11.5 cents.

"The restructuring and new equity commitment we have negotiated is indicative of the support of Opti's noteholders, who recognize the long term value in the company's asset base," said Opti CEO Chris Slubicki, in a release. 

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Opti Canada 3-month TSX trading chart

"The recapitalization of our balance sheet will provide us with cash resources to continue to advance operations at Long Lake, as well as to begin development at Kinosis, with our operating partner, Nexen," he said.

Opti has been searching for a buyer or merger partner for almost two years. In February, the heavily-indebted company announced the hiring of an investment banking firm to help it find a suitor.   

It owns a 35-per cent stake in the Long Lake oilsands project, with Calgary-based Nexen Inc. controlling the rest.

The companies have had trouble ramping up production from the steam-driven project due to a number of operational issues.