Drillship owner Pacific Drilling has announced that its reorganisation plan now has the full support of the company’s majority shareholder, Quantum Pacific.
The company now expects a smooth confirmation process and a quick emergence from chapter 11.
At the end of July, Pacific Drilling announced the reorganisation plan based on a proposal presented to the company by a group of secured creditors. The company raised $1.5bn of new capital, with Quantum Pacific committed to injecting $250m.
Under the plan, existing holders of Pacific Drilling common shares would receive no recovery.
“The agreement reached by QP and the Ad Hoc Group of secured creditors delivers the final piece needed to make the company’s plan a consensual one that has the support of the company’s major stakeholders. The agreement should allow the Plan to move forward efficiently and expeditiously through the implementation and confirmation process,” said Paul Reese, CEO of Pacific Drilling.
Upon consummation of the plan, the company expects to pay all unsecured trade claims in full. Consummation of the plan is subject to execution and delivery of definitive agreements, bankruptcy court approval, completion of the anticipated financing transactions and other customary conditions.
“After over a year of negotiations, we are happy to see a breakthrough in the talks between the Quantum Pacific Group and the Ad Hoc Group. With significant new capital commitments from both groups and the support from all stakeholders, Pacific Drilling is now on track to exit Chapter 11 with one of the strongest balance sheets in the industry and ample liquidity to see it through the long-expected recovery of the offshore drilling industry,” said Cyril Ducau, Pacific Drilling’s chairman.