Jackup rig and liftboat specialist Hercules Offshore has filed a Chapter 11 reorganisation plan after being hit hard by languishing oil prices.
The pre-packaged plan, filed 13 August, provides for more than USD1.2 billion of the company’s outstanding senior notes be converted to 96.9% of new common equity. In addition, USD450 million in new debt financing would be provided by note holders who want to participate on a pro rata basis.
Hercules has asserted that the proceeds would fully fund the remaining construction cost of the Hercules Highlander, a 4,760 dwt jackup rig being built for USD236 million at Sembcorp Marine’s Jurong Shipyard in Singapore.
The Houston-based company said it doesn’t expect the reorganisation to interrupt daily operations.
“Today’s filing is the next step in our financial restructuring,” commented Hercules president and CEO John Rynd. He added that the company was working towards a new capital structure to “provide a better foundation 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.”
Hercules reported a loss of USD88.3 million on revenue of USD79.2 million in 2Q15. The loss follows a loss of USD57.1 million in the previous quarter, and a profit of USD6.6 million in 2Q14.