Two Texas-based fracking sand companies — FCI Sand Operations LLC and FCI South LLC — filed for Chapter 11 bankruptcy on Wednesday, citing crushing debt, liquidity shortfalls, and disputes with their secured lender.
According to court filings, FCI Sand estimated between $100 million and $500 million in both assets and liabilities, while FCI South listed $50 million to $100 million of each. Together, they requested a joint administration of their cases.
Construction Delays and Collapsing Orders
The filings reveal that construction of a new sand processing plant slowed production just as the companies were struggling to meet customer demand. Once the plant finally came online, customer orders plunged due to a downturn in drilling activity in the Eagle Ford Shale, a 50-mile-wide, 400-mile-long formation in Texas known for producing oil and natural gas.
The combination left the companies starved of revenue and scrambling for liquidity. Efforts to raise capital by selling equity backfired, the filings said, as their lender declared the move a violation of loan agreements and threatened to enforce remedies.
