Offshore driller Ocean Rig has filed for Chapter 15 bankruptcy protection in a United States court amid a prolonged downturn in the offshore drilling market.
The purpose of Chapter 15 is to provide effective mechanisms for dealing with insolvency cases involving debtors, assets, claimants, and other parties of interest involving more than one country, according to the U.S. Courts .
Late last year, the offshore driller said it was considering a possible restructuring under US bankruptcy laws or another jurisdiction.
According to Reuters, the driller had $3.25 billion in debt at the end of December 2016.
Ocean Rig, together with its subsidiaries Drill Rigs Holdings, Drillships Financing Holding, and Drillships Ocean Ventures Inc., informed on Tuesday it has entered into a restructuring support agreement with creditors representing over 72% of Ocean Rig’s outstanding consolidated indebtedness for a financial restructuring.
The restructuring support agreement provides that the restructuring will be implemented by four separate but interconnected schemes of arrangement under Cayman Islands law.
Pursuant to the terms of the agreement, Ocean Rig and its subsidiaries presented winding up petitions to the Grand Court of the Cayman Islands on March 24, 2017 and sought the appointment of joint provisional liquidators for the purpose of the restructuring.
On March 27, 2017, the Grand Court appointed Simon Appell and Eleanor Fisher of AlixPartners as the joint provisional liquidators.
The provisional liquidation proceedings were started in the Cayman Islands and the companies are beneficiaries of a moratorium in the Cayman Islands.
The liquidators will work together with Ocean Rig and its subsidiaries to implement the restructuring and will promote the schemes of arrangement alongside the directors on behalf of the companies. The schemes are required to be approved by the Grand Court.
In addition, on March 27, 2017, the joint provisional liquidators started cases under Chapter 15 of the U.S. Bankruptcy Code for each of the companies seeking recognition of the provisional liquidation proceedings as foreign main proceedings.
Pursuant to the restructuring agreement, the company will not make any further payments of any kind on or relating to its existing financial indebtedness.
George Economou , Ocean Rig’s Chairman and Chief Executive Officer, commented: “Ocean Rig, similar to all rig operators, faces a deep and prolonged industry downturn. Given these conditions, Ocean Rig is taking the appropriate steps to allow us to emerge as a much stronger company that can take advantage of opportunities as they emerge.
“Our entire team at Ocean Rig is wholly committed to the success of the company and looks forward to our emergence from this financial restructuring that will ultimately enable us to better service our customers in the long term.”