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Hercules Offshore Prepackaged Chapter 11 Petition Filed–Second Bankruptcy

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Hercules Offshore and 13 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 16-11385. The Company, which provides shallow-water drilling services to the oil and natural gas industry, is represented by Robert J. Dehney of Morris, Nichols, Arsht & Tunnell.

The Company announced its entry into a restructuring support agreement (RSA) with lenders holding approximately 99% of the indebtedness under its first lien credit agreement. The agreement seeks to maximize value for the Company’s stakeholders and provide a smooth transition for employees, customers and suppliers through an orderly sale of the Company’s assets. Under the RSA, Hercules Offshore’s international subsidiaries will not be included as part of the Chapter 11 cases but will be part of the sale process. Concurrent with its Chapter 11 petition, the Company also filed a Joint Prepackaged Chapter 11 Plan of Reorganization and related Disclosure Statement.

The Plan provides that unsecured creditors will be paid in full. If the Company’s shareholders vote as a class to accept the Plan, shareholders will receive cash recoveries over time including a payment of $12.5 million upon the completion of the Chapter 11 process and additional cash distributions thereafter depending on the success of the sale of the Company’s assets through interests in the post-Chapter 11 wind-down vehicle. Secured lenders likewise are projected to receive cash payments largely dependent on the success of the sale process. As part of the process, Hercules Offshore also announced that it has entered into a definitive agreement to transfer the right to acquire the newbuild harsh environment jack-up rig, formerly named Hercules Highlander, to a subsidiary of Maersk Drilling.

According to the agreement, Maersk Highlander UK Ltd. succeeds to the right to take delivery of the rig and will settle the final payment of approximately $196 million with Jurong. Hercules Offshore emerged from a previous Chapter 11 filing in November 2015. A corporate release explains, “Since this 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’s services.”

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The post Hercules Offshore Prepackaged Chapter 11 Petition Filed–Second Bankruptcy appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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