Hercules Offshore to file for bankruptcy again. Prepares sale of assets

Hercules Offshore, a struggling drilling contractor which recently emerged from bankruptcy, has reached a restructuring deal with lenders and said it would start the sale of its assets.

The company today said that it has entered into a Restructuring Support Agreement (“RSA”) with lenders holding approximately 99 percent of the indebtedness under its first lien credit agreement.

As part of the agreement reached with creditors, Hercules and certain of its U.S. subsidiaries will solicit acceptances and rejections of its pre-packaged Chapter 11 plan from first lien lenders and shareholders, file voluntary Chapter 11 petitions to compromise the company’s obligations to its first lien lenders and provide a recovery to its shareholders, and then place all of the company’s unsold assets into a wind-down vehicle to ensure their continued, safe operation until they can be sold.

The company’s international subsidiaries will not be included as part of the Chapter 11 cases but will be part of the sale process, Hercules Offshore said.

 

Newbuild divested

 

Hercules said it would undertake an orderly sale of its assets, “to maximize value for the Company’s stakeholders and provide a smooth transition for employees.”

Earlier today, it has been announced that Hercules would transfer the right to acquire the newbuild harsh environment jack-up rig Hercules Highlander, to Maersk Drilling.

The rig is ready for immediate delivery from Jurong Shipyard in Singapore, and Maersk will settle the final payment of approximately $196 million with Jurong. With the rig, Maersk Drilling will ‘inherit’ the rig’s long term contract at the Culzean field in the UK North Sea.

No alternative

 

To remind, the driller completed its initial financial restructuring under Chapter 11 of the U.S. Bankruptcy Code with a new $450 million senior secured credit facility in place.

Since this time, the driller said on Friday, the ongoing decline in oil prices, the consolidation of its U.S. customer base and the addition of new capacity have negatively impacted dayrates and demand for Hercules’s services.

The company then in February formed a special committee to explore strategic alternatives, and the outcome is Friday’s announcement.

“Today’s RSA announcement is the outcome of that process and follows a thorough sale process, which did not yield results that would have been better for stakeholders than what is contemplated by the Plan,” Hercules concluded.

Offshore Energy Today Staff

Share this article

Follow Offshore Energy Today

Events>

<< Feb 2020 >>
MTWTFSS
27 28 29 30 31 1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 1

Africa Oil Week 2020

For over 25 years Africa Oil Week has been the meeting place for Africa’s most senior E&P stakeholders.

read more >

CERAWeek 2020

 Each year, CERA clients gathered for a few days in Houston…

read more >

Offshore Technology Conference (OTC) 2020

The Offshore Technology Conference (OTC) showcases leading-edge technology for offshore drilling, exploration…

read more >

2020 EXPLORATION AND PRODUCTION STANDARDS CONFERENCE ON OILFIELD EQUIPMENT AND MATERIALS

The development of consensus standards is one of API’s oldest and most successful programs.

read more >

Jobs>

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply