Offshore drilling contractor Paragon Offshore has completed its corporate and financial reorganization and emerged from Chapter 11.
In early June, Paragon’s consensual plan of reorganization was approved by the U.S. Bankruptcy Court, expecting to emerge in July.
Come July 18 and Paragon Offshore Ltd., the Cayman Islands successor company to Paragon Offshore plc (in administration), said that the plan of reorganization under chapter 11 of the United States Bankruptcy Code substantially de-levered the company’s ongoing business, eliminating approximately $2.3 billion of secured and unsecured debt.
New Paragon emerges with eight rigs currently operating plus a ninth rig expected to start operations in August 2017, approximately $165 million of available cash on its balance sheet, and $85 million of new debt, the driller noted.
Dean E. Taylor, Interim President and Chief Executive Officer of New Paragon, said, “It is with deep satisfaction that we close this chapter of New Paragon’s story. With a clean balance sheet and good liquidity, we emerge from bankruptcy as a stronger company—more focused on our core operating areas in the North Sea, Middle East, and India and better positioned to compete in the recovering, but still very challenging, offshore drilling industry.”
New Paragon also named a new board of directors with immediate effect. The board members, who were selected by Paragon plc’s secured and unsecured creditors following a search by Korn Ferry, are James Swent, a director of Energy XXI Gulf Coast, Inc., and retired Executive Vice President and Chief Financial Officer of Ensco plc, will serve as Chairman; Mark G. Barberio, a director of Life Storage, Inc., Exide Technologies, and Principal and Founder of Markapital, LLC; Michael Clark, a director of Halcón Resources Corporation and a former Partner and Portfolio Manager at SIR Capital Management LLC; Paul P. Huffard, IV, a director of Vubiq Networks and a former Senior Managing Director in Blackstone’s Restructuring and Reorganization Advisory Group; George Sandison, a director of Aspire Holdings LLC and retired Senior Vice President of Global E&P Services for Hess Corporation; and Zaki Selim, a director of Parker Drilling and GlassPoint Solar Inc. and retired President of Schlumberger Oilfield Services – Middle East/Asia.
Korn Ferry is also in the process of conducting a search for a Chief Executive Officer. In the interim, Dean Taylor will continue in this role.
“Our goal is to assist the company in capitalizing on opportunities to unlock value for Paragon’s new shareholders while delivering exemplary services to its customers,” said Swent on behalf of the incoming board of directors.
Upon emergence, New Paragon’s new equity will not be listed on an exchange, nor will New Paragon file any further reports with the U.S. Securities and Exchange Commission. Paragon plc’s existing shares will be deemed worthless and Paragon plc will be deregistered from the SEC.