Hercules Offshore lays off 60 employees at its Houston headquarters

Offshore drilling services firm Hercules Offshore, which filed its second bankruptcy in less than a year, laid off 60 employees at its Houston headquarters.

The company is expected to undertake further measures whilst undergoing restructuring.

As part of the bankruptcy process, Hercules anticipates a complete shutdown of its facilities.

This has resulted in the permanent terminations of 60 employees at the company’s Houston headquarters, according to data sent to the Texas Workforce Commission (TWC).

Source: RigZone

Seventy Seven Energy files for ‘prepackaged’ restructuring

U.S.-based oil field services provider Seventy Seven Energy Inc. filed for a pre-packaged bankruptcy with $1.1bn of debt amid depressed oil prices.

Under the terms of the restructuring plan, the company’s 2019 unsecured bondholders will receive at least 96.75% of the restructured company’s equity in exchange for debt of $650m.

A second group of bondholders are slated to get a 3.25% equity stake plus warrants for 15% of the new common stock if they vote to support the plan.

The company’s term-loan lenders will receive a 2% payout of their loan upfront and a better collateral package securing the remaining loan, which will be carried over.

The incremental term-loan lenders will be paid at least $15m upfront, and the remaining $84m balance of its loan will remain in place.

Additionally, current equity holders will receive warrants for 20% of new common stock if all the debtholders vote for the plan.

Seventy Seven said its trade creditors, suppliers and contractors will be paid in the ordinary course of business.

The company’s lenders, led by Wells Fargohave agreed to provide $100m in financing to fund the chapter 11 case, which Seventy Seven hopes to complete within 60 days.

Previously, the company had raised the possibility of bankruptcy in a February 2016 regulatory filing and hired advisers from Lazard to help it restructure its business.

The law firm Baker Botts is handling the company’s chapter 11 case, and the company has hired Alvarez & Marsal as its restructuring adviser. The case number is 16-11409 and Judge Laurie Selber Silverstein has been assigned the case.

Source: WSJ

U.S. court dismisses EIG’s bid to overthrow Intervention Energy’s bankruptcy

The judge overseeing proceedings of Intervention Energy‘s bankruptcy, overturned lender EIG Global Energy Partner’s bid to dismiss the court case.

Intervention filed for bankruptcy protection in May 2016 and was immediately met with opposition from EIG, which called for the case to be dismissed.

EIG argued that Intervention didn’t have the authority to file for bankruptcy without its approval as such an action required shareholder approval.

As part of the deal, Intervention agreed to secure 100% shareholder approval in order to file for bankruptcy. However, EIG said it didn’t consent to the company’s bankruptcy filing.

Intervention and EIG met in court last week, both warning that a ruling could have a broad impact beyond their specific dispute.

Intervention’s attorney said if the judge agreed to dismiss the case, this decision would allow other lenders to demand such consent rights and could negatively impact the companies’ ability to restructure outside of court.

Meanwhile, EIG argued a decision in favor of Intervention would essentially take away a company’s rights under state law to enter contracts.

A hearing would be held on Tuesday to discuss the judge’s decision to deny the dismissal as well as to proceed with other requests designed to keep Intervention’s bankruptcy moving forward.

EIG holds about $140m of Intervention’s bond debt, which stems from a $200m financing deal reached in 2012 to finance well developments.

Source: WSJ

Caesar’s restructuring talks face still opposition from junior bondholders

According to a retired federal judge brokering a restructuring deal for Caesar’s Entertainment Corp.‘s bankrupt operating unit, talks between the casino operator and a group of creditors have stalled, making settlement look unlikely at the moment.

It appears that Caesar’s declined to participate in a meeting with junior bondholders beyond the meeting held on 7 April 2016.

Caesar’s operating unit planned on restructuring c.$18bn of debt at the time of filing for bankruptcy which resulted in claims being filed by creditors, including junior bondholders.

It appears that as per Caesar’s latest settlement agreement, claims valued by the company at $4bn significantly undermined the value identified by junior bondholders at $12bn.

The operating unit’s restructuring plan would be put to vote in a Chicago court on Tuesday which faces opposition from all classes of creditors.

As per court filings made on Monday, Caesar’s operating unit stated that restructuring talks progressed well with senior and general class of creditors but its junior bondholders posed a significant challenge.

Source: WSJ


Hercules Offshore files for bankruptcy for the second time in less than a year

Hercules Offshore Inc. filed for bankruptcy protection, its second in just under a year after it could not find itself a buyer in the last few months amid a depressed market for oil drilling services.

According to CEO Troy Carson, the company was planning to sell off its assets in a ‘controlled-manner’ as it had the support of almost all the top lenders that helped it out of bankruptcy in November 2015.

A voting report stated that Hercules received support from lenders holding more than $249m in first-lien loans.

Hercules was said to court its stockholders, promising a “meaningful recovery” if they agreed to go along with the new plan. The company’s stock was created in the previous bankruptcy, when bondholders agreed to take equity in lieu of collecting their debts of $1.2bn.

According to court documents, shareholders were being offered between $12.5m and $41m, depending on how Hercules’s asset sales go, if they supported the bankruptcy wind-down plan. Otherwise, a negative vote would result in a recovery ranging from nothing to $27m.

Hercules’ international subsidiaries wouldn’t be included in the U.S. bankruptcy, but they would be part of the final sale process.

 Source: WSJ

Chaparral Energy gets proposed commitment for up to $100m offering

On 23 May 2016, Chaparral Energy received commitment from banks to provide it funding of $100m as part of the restructuring process.

Chaparral would continue to engage with all its lenders to achieve an agreement on terms of its restructuring.

The company provided a version of its restructuring proposal to certain members of an ad hoc committee of unsecured noteholders but after evaluating, the noteholders rejected the proposal.

It appears that the terms of the consensual restructuring may or may not involve an equity offering.

Source: Reuters

Hercules Offshore announces restructuring plan with lenders

Hercules Offshore entered into a restructuring support agreement (RSA) with its lenders through a pre-packaged Chapter-11 plan.

The plan provides for an orderly sale process, and ensures that its unsecured creditors would be repaid entirely on their obligations.

Further, the company’s international subsidiaries would not be included as part of Chapter-11 filing but would be a part of the sale process.

Separately, Hercules Offshore agreed to transfer the right to buy the Hercules Highlander jack-up rig to a subsidiary of Maersk Drilling.

Source: Market Watch

Update: Pacific Exploration’s restructuring plan

Key takeaways of the updates on Pacific Exploration’s restructuring plan:

  • $500m debtor-in-possession financing to be provided as part of restructuring transaction
  • Gained court approval of consensual resolution with IFC of stay of extension of proceedings
  • Company would be able to continue paying all of suppliers, trade partners and contractors of subsidiaries across jurisdictions
  • Restructuring transaction aims to reduce debt and improve its liquidity
  • The superior court of Ontario approved an extension of stay of proceedings until 26 August 2016

Source: Reuters


Abengoa’s unit seeks more time for Chapter 11 plan

Bankrupt Spanish renewable energy company Abengoa SA‘s subsidiary was seeking court approval for more time to control its restructuring case, saying that it was not currently in position to fully evaluate claims against it or prepare a reorganization plan.

Abengoa Bioenergy US Holding LLC said in court papers it needs a 120-day extension to its exclusivity period to give it until 21 October 2016 to file a reorganization plan.

Source: Reuters

SunEdison’s junior creditors to conduct bankruptcy probe

According to an announcement in the New York court, bankrupt solar power producer SunEdison allowed its unsecured creditors to investigate its bankruptcy amid an agreement the company reached with its junior creditors on its finance package.

SunEdison, carrying debt of $16bn at the time of filing for bankruptcy. The troubled company hasn’t yet filed audited financial statements for 2015.

It appears that during court proceedings, creditor’s evaluation of SunEdison’s financial affairs revealed little information regarding SunEdison’s subsidiaries that were not involved in the bankruptcy.

In exchange for the right to investigate, SunEdison’s unsecured creditors agreed to withdraw opposition to the company’s $300m bankruptcy financing package

SunEdison’s yieldcos or its most significant creditors, TerraForm Power Inc. and TerraForm Global Inc., reached an agreement designed to make sure the company that once owned them would be able to meet its obligations to them.

The committee investigation would replace a probe SunEdison had earlier requested, one that creditors declared to be too limited in scope and budget.

In addition, SunEdison’s bankruptcy financers, which are also the company’s senior lenders, agreed to free up for junior creditors up to $50m of insurance coverage available under the company’s officers and directors liability insurance coverage.

Source: WSJ