Offshore drilling services provider Seadrill Ltd. agreed to a debt-to-equity exchange with certain bondholders as part of its broader debt restructuring plan.
The company agreed to issue a total of 7.5m new equity shares having par value of $2 per share in exchange for $50m principal amount of the 5.625% Senior Unsecured notes due 2017.
Settlement of this offer was expected to occur on 13 June 2016, upon which the company would have a total of 508,444,280 shares of its common stock outstanding.
Source: Seadrill Ltd. Press Release
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 Fargo, have 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.
South Korean integrated logistics and container-freight transport company Hyundai Merchant Marine Co.’s bondholders plan to decide whether to approve the company’s debt restructuring offer during a two-day meet which continues till Wednesday.
During the meeting, Hyundai Merchant would propose a plan to swap more than half of its debt of approximately KRW 800bn ($672m) for equity and the payment of the remaining debt after two years.
Previously, creditors, led by state-run Korea Development Bank, agreed to swap KRW 680bn worth of debt for the company’s equity, as part of efforts to keep it afloat. Hyundai Merchant had debts of about KRW 5.2tn as of 31 March 2016.
The debt recast is one of the key prerequisites for the company to be put under a creditor-led rehabilitation scheme.
As part of its restructuring, Hyundai Merchant was in final talks with owners of its chartered ships to cut leasing rates, whose outcome may come out later this week. According to creditors, high charter rates were negatively impacting the company’s financial health, and a cut in the leasing rates was one of the key preconditions for the survival of the shipper.
Hyundai Merchant paid a total of KRW 1.9tn won to 22 owners of chartered ships in 2015, which accounted for 32% of its annual sales of KRW 5.8tn.
Creditors have also demanded that the shipper be included in a global shipping alliance to stay competitive. However, the company may be excluded from joining the group unless it cuts its charter rates and reschedules its debt.
Hyundai Merchant stated that its inclusion into a global shipping alliance would be guaranteed if it successfully negotiates charter rate cuts and its debt recast is approved by its creditors and bondholders.
Source: Yonhap News Agency
Creditors of South Korean container-freight logistics provider Hyundai Merchant agreed to a debt-to-equity swap involving the company’s debt of KRW 680bn ($570m), according to lead creditor Korea Development Bank.
The agreement is contingent on conditions including Hyundai Merchant Marine joining an alliance involving major shipping firms.
Canada-based oilsands producer Connacher Oil & Gas Ltd was seeking protection from creditors one year after emerging from bankruptcy.
The company has submitted to the Court of Queen’s Bench, a proposal to shield it under the Companies Creditor’s Arrangement Act whilst it restructures its business which includes part or outright sale of the company.
During the company’s previous restructuring in May 2015, creditors holding $1bn of the Connacher’s debt ended up owning the entire company in a debt-to-equity swap transaction.
The company cited depressed oil prices as one of the main reasons for filing for bankruptcy in 2016. That combined with the restricted output from its oilsands project at Fort McMurray negatively impacted the company.
The company was exploring restructuring options in March 2016 and had also missed an interest payment on $35m of its debt which it had raised post-restructuring.
Source: Winnipeg Free Press
U.S-based high-end supermarket chain Fairway Group filed for a “pre-pack” bankruptcy and reached an agreement with creditors to cut $140m in debt.
The chain, which primarily operates its stores in New York, reached an agreement with 70% of its senior secured creditors to convert $140m of c.$279m of debt into equity.
The “pre-pack” chapter 11 filing is an agreement and restructuring plan with a majority of creditors that has already been reached.
The secured lenders have also provided $55m in a superpriority secured debtor-in-possession (DIP) credit facility and a $30.6m letter of credit to cover operating financing.
The proposed DIP financing would support Fairway’s reorganization plans and enable normal post-petition operation of its business, including timely payment of employee wages, benefits and other obligations.
Source: Undercurrent News