Twin Butte Energy Ltd. debenture holders voted to reject a takeover bid by Hong Kong's privately held Reignwood Resources Holding Pte Ltd. on Aug. 29, throwing the cash-strapped Canadian oil and gas producer's financial future into uncertainty.

Under the proposed terms of the deal, announced in June, shareholders would have received 6 Canadian cents per share while long-term debtholders would have received C$140 per C$1,000 amount of debentures, or essentially 14 Canadian cents to the dollar.

But following a rebellion led by Murray Bockhold of Bockhold Investment Management Group, who argued they should be entitled to more, only 32% of debenture holders voted in favor of the deal, well below the two-thirds required. Shareholders voted 76% in favor of the Reignwood takeover.

In a news release Rob Wollman, CEO of Calgary-based Twin Butte said as a result of the vote the arrangement with Reignwood could be terminated by either party.

It also means the grace period granted to Twin Butte by its senior lenders is over, giving them the right to demand repayment of the company's bank debt and appoint a receiver to liquidate assets.

Twin Butte was producing around 13,000 barrels of oil equivalent per day in the second quarter of 2016, down 27% from the same period last year. The company focuses on medium and heavy oil operations around the Alberta-Saskatchewan border in the Lloydminster region.