The U.S. Bankruptcy Court has granted recognition of Cayman proceedings as foreign main proceedings to the indebted offshore dilling company, Ocean Rig.
According to the driller’s statement from Friday, the U.S. Bankruptcy Court has issued a memorandum opinion and an order granting recognition of the provisional liquidation and scheme of arrangement proceedings of the company and its subsidiaries, Drill Rigs Holdings Inc. (DRH), Drillships Financing Holding Inc. (DFH), and Drillships Ocean Ventures Inc., (DOV), pending in the Grand Court of the Cayman Islands as foreign main proceedings, and of the joint provisional liquidators (the “JPLs”) as the foreign representatives of the scheme companies in the United States.
Creditors’ meetings were held for the scheme companies in the Cayman Islands on August 11, 2017, and the scheme of arrangement proposed by each scheme company obtained an overwhelming level of support from affected creditors. The DFH, DOV and DRH schemes each obtained the approval of 100% of the creditors voting on those schemes and the UDW scheme obtained the approval of 98.51% of the creditors. Only five funds managed by Highland Capital Management LP opposed the UDW Scheme, Ocean Rig said.
Hearings at which the Cayman Court will consider whether to approve the schemes will be held on September 4 – 6. If the schemes are approved by the Cayman Court, the U.S. Bankruptcy Court will conduct a hearing on September 20 to consider the entry of an order giving full force and effect to the schemes in the United States.
According to the company, the schemes affect only financial indebtedness and operations will continue unaffected. Trade creditors and vendors will continue to be paid in the ordinary course of business and will not be affected by any of the schemes.
If the schemes are sanctioned, the scheme companies will be substantially deleveraged through an exchange of approximately $3.7 billion principal amount of debt for new equity of the company, approximately $288 million of cash, and $450 million of new secured debt.
George Economou, Chairman and CEO commented: “We are delighted that the U.S. Bankruptcy Court has seen fit to grant recognition of our restructuring efforts in the Cayman Islands. We are looking forward to the sanction hearings in early September.”
Simon Appell on behalf of the JPLs of the Scheme Companies commented: “Recognition by the U.S. Bankruptcy Court of the provisional liquidation and scheme of arrangement proceedings was an important milestone. The JPLs are pleased that the restructuring is progressing on schedule.”