May 25 (Reuters) - Terrace Energy Corp TZR.V :
* Terrace continues restructuring plans and provides update
* Subsidiary was unable to satisfy certain financial ratio
covenants set out in credit agreement with its secured lender
* All material capital expenditures have been deferred until
late 2017
* Has negotiated right to receive additional distributions
of future cash flows from STS after certain financial milestones
are achieved
* Management and staff have voluntarily modified their
employment contracts to substantially reduce salaries
* Company, on behalf of STS, was able to successfully
negotiate settlement of over USD$25 million in secured debt
without having to pay cash
* Will continue to work with advisors to evaluate different
financial options, including, but not limited to, raising
additional capital
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