George Economou’s Ocean Rig and its subsidiaries have filed for bankruptcy restructuring with the appointment of provisional liquidators.
Ocean Rig and its subsidiaries – Drill Rigs Holdings Inc, Drillships Financing Holding Inc and Drillships Ocean Ventures Inc – have entered into a restructuring support agreement with credtors representing over 72% of Ocean Rig’s outstanding consolidated indebtedness for a financial restructuring.
The company pointed out that operations will continue unaffected and trade creditors/vendors will continue to be paid in the ordinary course of business.
Economou, chairman and ceo of Ocean Rig, 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 mucn stronger company that can take advantage of opportunities as they emerge.”
On 27 March, the Grand Court of the Cayman Islands appointed Simon Appell and Eleanor Fisher of AlixPartners as joint provisional liquidators. The restructuring will be implemented by four separate but interconnected schemes of arrangement under Cayman Islands law, for Ocean Rig and the three subsidiaries.
The provisional liquidators has also sought recognition in the US of the Provisional Liquidation Proceedings in the Cayman Islands as foreign main proceedings under Chapter 15 of the US Bankruptcy Code.
The scheme of arrangement will see the four companies be substantially deleveraged through an exchange of approximately $3.69bn principal amount of debt for new equity of the Ocean Rig, approximately $288m of cash, and $450m of new secured debt.
In August 2016, Ocean Rig had revealed it was considering a reorganisation under bankruptcy due to the protracted depressing state of the offshore oil and gas market.