Pacific Drilling and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11. Greenhill & Co. is acting as financial advisor, Latham & Watkins and Jones Walker are acting as legal counsel and AlixPartners is acting as restructuring advisor.
Houlihan Lokey is acting as financial advisor and Akin Gump Strauss Hauer & Feld is acting as legal advisor to the noteholders.
Pacific Drilling entered into a restructuring support agreement with an ad hoc group of the largest holders of its outstanding bond debt. The financial restructuring will eliminate the company’s approximately $1.1 billion in principal amount of outstanding bond debt through the cancellation and exchange of debt for new equity in the reorganized company.
Pacific Drilling also repaid its $50 million first lien superpriority revolving credit agreement with Angelo, Gordon Energy Servicer, as administrative agent and the lenders party thereto.
With approximately $120 million of cash and cash equivalents, Pacific Drilling intends to continue its worldwide operations as usual, deliver services for existing and prospective clients and, subject to court approval, pay all obligations incurred during the Chapter 11 case in full. The company expects to emerge by year-end with access to new capital in the form of an $80 million exit facility and with approximately $100 million of cash and cash equivalents on the balance sheet.
“After spending several months evaluating options for addressing our long-term financial needs in light of challenging market and operational conditions, we are pleased to reach agreement with an ad hoc group of our noteholders that paves the way for an expeditious Chapter 11 restructuring process. This restructuring is intended to enhance our financial flexibility by eliminating our entire prepetition debt and cash interest burden. We expect to emerge from this process in a stronger position to compete in today’s challenging, lower-commodity-price environment. I appreciate the ongoing support of our employees, clients and vendors as we complete this accelerated restructuring process. We remain committed to delivering the safest, most efficient and reliable deepwater drilling services in the industry.” Bernie Wolford, CEO, of Pacific Drilling, said.
Pacific Drilling is an offshore ultra-deepwater drilling company.
