Hercules Offshore restructuring support deal amended; sale completed

By Caroline Salls

Pittsburgh, Nov. 7 – Hercules Offshore, Inc. entered into a third amendment to its restructuring support agreement with an informal group of lenders, according to an 8-K filed Monday with the Securities and Exchange Commission.

Under the amendment, the outside date for entry of a Chapter 11 plan confirmation order was extended to Nov. 11, and the order must be final by Nov. 25.

The outside plan effective date deadline was extended to Dec. 2.

In addition, the amount of a rejection lender wind-down claim was reduced by $32.5 million to $546.5 million.

If the holders of the company’s common stock vote as a class to reject the plan, the amount each holder will receive was increased to also include a rejection shareholder class distribution. If the common stockholder class votes to reject the plan, upon payment in full of the lender wind-down claim, the two members of the wind-down entity board designated by the requisite consenting lenders will be replaced by two members designated by the equity committee.

Under the plan, common stockholders, except for those that are also first-lien lenders and parties to the restructuring support agreement, will not be deemed to have granted releases to specified claims or causes of action.

If the common stockholders vote as a class to reject the plan, the wind-down entity will make distributions first on account of the rejection shareholder class distribution. After that has been fully funded, distributions will be made on account of the rejection lender wind-down claim and then to holders of wind-down entity interests.

In connection with court ordered mediation, Hercules said it reached a settlement with the lender group related to the first-lien claim reduction amount and the rejection shareholder cash distribution.

In addition, the company said it completed the $65.09 million sale of three jack-up drilling rigs to Advanced Energy Systems SAE on Nov. 2.

Hercules, a Houston-based provider of offshore drilling equipment and services, filed bankruptcy on June 6 in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 case number is 16-11385.

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