On 19th May, 2020 Hornbeck Offshore Services Inc. (HOS) filed for bankruptcy in the Southern District of Texas, USA and will implement a pre-packaged Chapter 11 restructuring support agreement with lenders that was agreed to in April.
Secured lenders hold approximately 83% of the Covington, La based offshore service vessel operator’s aggregate secured debt and unsecured note holders hold approximately 79% of the company’s aggregate unsecured notes outstanding related to a balance sheet restructuring of Hornbeck Offshore. The restructuring will be implemented in U.S. Bankruptcy Court for the Southern District of Texas. HOS said it will ask a judge to approve the agreement by 19th June.
The restructuring support agreement calls for a $75 million 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. This will enable Hornbeck Offshore to operate in the ordinary course of business without disruption to its customers, vendors and workforce. The agreement provides for payment in full of all vendors and employees. In addition, the company will have post-emergence access to $100 million of new equity capital through a common stock rights offering, fully backstopped by existing creditors, and the ability to arrange additional post-emergence financing’s for certain purposes, including strategic initiatives.
“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,” Todd M. Hornbeck, chairman, president and CEO said in a statement in April. “I want to thank our secured lenders and unsecured noteholders 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.”
All Images of HOS CENTERLINE underway offshore Sicily back to 24th May 2014.
Watermarked Photos are by Capt. Lawrence Dalli. NO PHOTOS can be used or manipulated without our permission. © All rights reserved. Malta Ship Photos & Action Photos – www.maltashipphotos.com
Published – Thursday 2nd July, 2020