Hercules Offshore files for Chapter 11 bankruptcy

NASDAQ-listed drilling contractor Hercules Offshore has said in an announcement today that it has filed a pre-packaged plan of reorganization under Chapter 11.

The Houston-based company said that the reorganisation will take around 45-60 days, and it anticipated receiving the go-ahead from the courts to pay employee wages and suppliers without interruption.

A key part of the restructuring, originally announced in June, will see senior notes worth $1.2bn converted to shares, and an additional $450m of new capital provided by senior noteholders to fund newbuild Hercules Highlander and to keep the company liquid.

John T. Rynd, president and CEO of Hercules, commented: “Today’s filing is the next step in our financial restructuring. We are working toward a new capital structure which will provide a better foundation for Hercules to meet the challenges in the global offshore drilling market due to the downcycle in crude oil prices and expected influx of newbuild jackup rigs over the coming years.

“The overwhelming support by the noteholders of the plan will enable Hercules to expedite the restructuring process and emerge by mid-fall. We do not expect any interruption to our daily operations as a result of today’s filing.”

Hercules says that it has solicited the company’s senior noteholders resulting in overwhelming approval of the pre-packaged plan with more than 300 senior noteholders, with aggregate holdings in excess of $1.2 bn, voting to accept the plan while only two minor holders voting against the plan.

Grant Rowles

Grant spent nine years at Informa Group based in London, Sydney, Hong Kong and Singapore. He gained strong management experience in publishing, conferences and awards schemes in the shipping and legal areas, working on a number of titles including Lloyd's List. In 2009 Grant joined Seatrade responsible for the commercial development of Seatrade’s Asia products. In 2012, with Sam Chambers, he co-founded Asia Shipping Media.
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