July 31, 2018 – Pacific Drilling S.A. filed with the U.S. Bankruptcy Court a Joint Plan of Reorganization [Docket No. 450] and related Disclosure Statement [Docket No. 451]. The Disclosure Statement notes, “The Plan and the Restructuring provide for the comprehensive restructuring and recapitalization of the Debtors through the following principal transactions: (a) $700.0 million issuance of notes maturing five years following their issuance, secured by a first-priority security interest in and Lien on certain of the Reorganized Debtors’ assets (the ‘New First Lien Notes’); (b) $300.0 million issuance of notes maturing seven years after their issuance, with interest payable in kind or in cash, subject to certain limitations, at the option of the issuer, secured by a second-priority security interest and lien on certain of the Reorganized Debtors’ assets (the ‘New Second Lien PIK Toggle Notes’); (c) $400.0 million equity rights offering (the ‘Rights Offering’) that will provide Holders of Allowed Term Loan B Claims, 2017 Notes Claims, and 2020 Notes Claims with subscription rights to purchase up to 51.2% of the New Common Shares outstanding on the Effective Date (the ‘Rights Offering Subscription Rights’), in each case based on such Holders’ Pro Rata shares, at a price that represents an implied 46.9% discount to a stipulated plan equity value of $1,472 million (based on a total enterprise value of $2,050 million) (the ‘Equity Purchase Price’), subject to dilution by the new equity issued pursuant to the management incentive plan to be entered into by Reorganized PDSA, as approved by the New Board of Reorganized PDSA on or after the Effective Date (the ‘Management Incentive Plan’)….Solely for purposes of the Plan and the Disclosure Statement, Evercore, as investment banker to the Debtors and at their request, has estimated the total enterprise value exclusive of any balance sheet cash or cash equivalents (the ‘Total Enterprise Value’) of the Reorganized Debtors on a going concern basis as of the assumed Effective Date of September 30, 2018 (the ‘Assumed Effective Date’)….As a result of the analysis described herein, Evercore estimates the Total Enterprise Value of the Reorganized Debtors to be approximately $1,650 million to $2,450 million, with a mid-point of $2,050 million, as of the Assumed Effective Date. After deducting pro forma funded debt of $1,024 million and adding post-emergence Cash of $446 million projected as of the Assumed Effective Date after giving effect to the equity investment on account of the Rights Offering, Evercore’s estimate of Total Enterprise Value implies a value for the common stock of the Reorganized Debtors (the ‘Plan Equity Value (excluding the impact of SHI)’) of approximately $1,072 million to $1,872 million, with a midpoint of $1,472 million.”
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