US offshore vessel operator Hornbeck Offshore has entered into a restructuring support agreement with the majority of its secured lenders and unsecured note holders regarding a balance sheet restructuring scheme while under chapter 11.
The agreement contemplates a $75m debtor-in-possession term loan facility provided by existing creditors and permitted use of existing cash on hand and cash generated from operations to support the business during the financial restructuring process, and it provides for payment in full of all vendors and employees.
The restructuring is expected to be implemented in the coming weeks with a targeted completion date prior to the end of the second quarter of this year.
“The COVID-19 pandemic and the recent drop in oil prices due to an acute global supply-demand imbalance have significantly impacted the industries we serve, making an already challenging environment for the Company even more difficult. The shared objectives of the company and our creditors are to meaningfully reduce the company’s financial leverage on a consensual basis and source new capital to position the company for future growth,” said Todd Hornbeck, chairman of Hornbeck Offshore.
“I want to thank our secured lenders and unsecured note holders for joining together with us on a game plan for an expedited court-supervised financial restructuring process. This consensual approach to reorganization and recapitalization is in the best long-term interest of our Company, as it will enable us to take advantage of new opportunities while continuing to support our customers, retain our employees and pay our vendors,” Hornbeck added.
Hornbeck Offshore provides offshore vessel services primarily in the Gulf of Mexico and Latin America with a fleet of over 70 OSVs.