Hercules Offshore, a shallow-water offshore drilling contractor, has filed for bankruptcy protection again.
The U.S.-based offshore driller filed for bankruptcy in a Delaware court on Monday, June 6.
Under the terms of the Plan, all of the Company’s assets will be marketed for sale, and those left unsold at the completion of the Chapter 11 process will be placed into a wind-down vehicle to ensure their continued, safe operation until sales are finalized. The Company’s international subsidiaries are not included as part of the Chapter 11 cases but will be part of the sale process.
To remind, Hercules Offshore had in November 2015 emerged from Chapter 11 bankruptcy, and completed funding for a $450 million senior secured credit facility.
However, Hercules recently said that, since that time, 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’ services.
The news of today’s bankruptcy filing came as no surprise as the company late in May reached a restructuring deal with lenders which entailed Hercules and certain of its U.S. subsidiaries would 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 in May.
In a statement on Monday, June 6, Hercules said it plans to operate its rigs and vessels as usual throughout the sale process and to meet its commitments to employees, customers and suppliers worldwide.
“To this end, the Company has filed the typical First Day Motions as part of its U.S. Chapter 11 case to continue its existing employee wage and benefit programs and to maintain its insurance. The Company also has filed a motion to continue paying suppliers’ claims for goods and services delivered prior to today’s filings under normal payment terms and fully expects to pay suppliers as usual for deliveries made from today forward,” Hercules said.
Offshore Energy Today Staff