March 26, 2019 – The Debtors notified the Court [Docket No. 493] that their Amended Joint Chapter 11 Plan had become effective as of March 26, 2019. The Court had previously confirmed the Debtors' Plan on March 7, 2019 [Docket No. 459].
On November 12, 2018, Parker Drilling Company and 19 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of Texas, lead case number 18-36958. In its Chapter 11 Petition, the Company, which provides drilling rigs and equipment to oil and gas drilling companies, noted between 10,000 and 25,000 creditors; estimated assets between $10mn and $50mn; and estimated liabilities between $500mn and $1bn.
In a press release announcing the emergence from bankruptcy, the Company noted, “Parker moves forward with a stronger financial position, having reduced total debt by approximately two-thirds, from $585 million to $210 million, and securing access to $50 million in exit financing. The Company has also raised an additional $95 million through a fully-backstopped equity rights offering.
Shares of the Company's common stock will no longer trade on the OTC Pink Marketplace effective as of March 26, 2019. The Company intends to list its common stock on the New York Stock Exchange ('NYSE') as soon as possible.
Gary Rich, the Company’s President and Chief Executive Officer, added: "Our new capital structure allows us to pursue profitable growth opportunities and enhances our resiliency across industry cycles….Now, we have the right platform on which we can build scale in recovering markets and expand our suite of value-added services and technology-driven solutions to meet customers' needs across the full drilling cycle."
Voting Results
The Plan was accepted by holders of (i) 98.58% in number (99.99% in amount) of those voting in Class 4 ("2020 Notes Claims"), (ii) 95.37% in number (88.94% in amount) of those voting Class 5 ("2022 Notes Claims"), (iii) 99.63% of those voting in Class 9 ("Existing Preferred Interests") and (iv) 98.51% of those voting in Class 10 ("Existing Common Interests").
The following is a summary of classes, claims, and voting rights and expected recoveries (defined terms are as defined in the Plan):
- Class 1 (“Other Secured Claims”) was unimpaired, deemed to accept and not entitled to vote the Plan. The projected amount of claims is $9.8mn and expected recovery is 100%.
- Class 2 (“Other Priority Claims”) was unimpaired, deemed to accept and not entitled to vote the Plan. The projected amount of claims is $0 and expected recovery is 100%.
- Class 3 (“Existing ABL Claims”) was unimpaired, deemed to accept and not entitled to vote the Plan. The projected amount of claims is $0 and expected recovery is 100%.
- Class 4 (“2020 Notes Claims”) was impaired and entitled to vote on the Plan. Holders will receive their pro rata share of (i) 34.3% of the New Common Stock, (ii) $92,571,429 of the New Second Lien Term Loan and (iii) 38.4% of the Noteholder Subscription Rights. The projected amount of claims is is $231.1mn and expected recovery is 73%. The original principal amount of the 2020 Notes was $225mn.
- Class 5 (“2022 Notes Claims”) was impaired and entitled to vote the Plan. Holders will receive their pro rata share of (i) 62.9% of the New Common Stock, (ii) $117,428,571 of the New Second Lien Term Loan and (iii) 61.5% of the Noteholder Subscription Rights. The projected amount of claims is $369.9mn and expected recovery is 69%. The original principal amount of the 2022 Notes was $360mn.
- Class 6 (“General Unsecured Claims”) was unimpaired, deemed to accept and not entitled to vote the Plan. Holder will receive cash in an amount equal to such Allowed General Unsecured Claim on the later of: (i) the Effective Date; or (ii) the date due in the ordinary course of business in accordance with the terms and conditions of the particular transaction or agreement giving rise to such Allowed General Unsecured Claim. The projected amount of claims is $14.5mn and expected recovery is 100%.
- Class 7 (“Intercompany Claims”) was unimpaired, deemed to accept and not entitled to vote the Plan. The projected amount of claims is N/A and expected recovery is N/A.
- Class 8 (“Intercompany Interests”) was unimpaired, deemed to accept and not entitled to vote the Plan. The projected amount of claims is N/A and expected recovery is N/A.
- Class 9 (“Existing Preferred Interests”) was impaired and entitled to vote the Plan. Holder will receive their pro rata share of (i) 1.1% of the New Common Stock, (ii) 40.0% of the New Warrants and (iii) the Existing Preferred Stockholder Subscription Rights, The projected amount of claims is N/A and expected recovery is 28%.
- Class 10 (“Existing Common Interests”) was impaired and entitled to vote the Plan. Each Holder will receive pro rata share of (i) 1.65% of the New Common Stock, (ii) 60.0% of the New Warrants and (iii) the Existing Common Stockholder Subscription Rights. The projected amount of claims is N/A and expected recovery is 3%.
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