Valaris received approval from the United States Bankruptcy Court for the Southern District of Texas of its prearranged plan of reorganization. In addition to bankruptcy court confirmation, the plan received support from approximately 80% of the company’s unsecured notes and bank lenders representing 100% of the company’s credit facility claims. In addition, approximately 81% of the company’s voting shareholders voted to accept the plan.
“I am pleased that we have received strong support for the company’s amended plan. This is an important milestone, as it clears the path for Valaris to emerge from Chapter 11 early in the second quarter. The overwhelming support from our noteholders and bank lenders shows their confidence in our go-forward strategy and strength as a company,” Tom Burke, president and CEO of Valaris, said. “This achievement would not have been possible without the continued dedication and loyalty from our employees, customers, vendors and other partners. We look forward to emerging swiftly with our strengthened capital structure, which, combined with our high-quality rig fleet and personnel, positions the company well in a still challenging offshore drilling market.”
Upon emergence and implementation of the plan, Valaris will eliminate $7.1 billion of existing debt. Valaris also will receive a $520 million capital injection through the issuance of a $550 million secured note maturing in 2028. The note includes the option of an 8.25% cash coupon, a 10.25% half cash, half paid-in-kind coupon, or a 12% paid-in-kind coupon, all at the company’s election.
Valaris also reached an agreement with Daewoo Shipbuilding & Marine Engineering to amend its two newbuild drillship contracts to extend each delivery date to Dec. 31, 2023, while giving the company the option to take delivery early or terminate the contracts on a non-recourse basis. Final payments for the VALARIS DS-13 and VALARIS DS-14 are estimated to be approximately $119 million and $218 million, respectively.
Kirkland & Ellis and Slaughter and May are serving as legal advisors to Valaris in connection with the restructuring. Lazard is serving as Valaris’ financial advisor and Alvarez & Marsal is serving as its restructuring advisor. Kramer Levin Naftalis & Frankel and Akin Gump Strauss Hauer & Feld are serving as legal advisors to the consenting noteholders, and Houlihan Lokey is serving as financial advisor. Shearman & Sterling is serving as legal advisor to the RCF administrative agent, and Perella Weinberg Partners is serving as financial advisor.
Valaris is an offshore drilling services provider.
