Offshore driller Ocean Rig is considering a reorganisation under bankruptcy its chairman and CEO George Economou has revealed in the company’s latest quarterly results report.
Ocean Rig posted net income of $156.1m for the quarter but Economou warned that despite positive operation performance the market remains negative and that the company will focus on maintaining liquidity and de-levering the company.
Economou said: “Given the ongoing distressed market environment as well as the consensus view that a recovery may not occur for several years, we have engaged financial and legal advisors to assess the viability of our capital structure and alternatives that may be available to pursue. In the recent period, we have been approached by several of our debt holders who have in certain cases also retained legal counsel and financial advisors.
“While we have not made any specific decisions, it is evident to the company and a number of its creditors that its debt obligations will need to be amended or exchanged for new debt and/or equity securities, and some debt holders may have little or no recovery on their investment. We continue to explore and consider alternatives, which may include a possible reorganization under US bankruptcy laws or another jurisdiction, so that we can ride out this very difficult cycle with feasible prospects for strong, long-term success.”
The company also announced that it has reached an agreement with Samsung Heavy Industries to reschedule installments, and postpone the delivery for two of three drillships currently under construction at the yard. It also managed to renegotiate the price of the drillships.
This is not the first time Economou has signalled a possible bankruptcy of one of his companies this year. In June, the Greek warned New York-listed DryShips might struggle to carry on as a going concern, having racked up huge debts.
