Hornbeck Offshore Services pre-packaged plan effective as of Sept. 4

By Caroline Salls

Pittsburgh, Sept. 8 – Hornbeck Offshore Services, Inc.’s pre-packaged plan of reorganization took effect on Friday, according to a notice filed with the U.S. Bankruptcy Court for the Southern District of Texas.

The plan was confirmed on June 19.

As previously reported, under the pre-packaged plan, the reorganized company will use cash to repay debtor-in-possession financing claims in excess of $100 million. Any DIP financing claims not repaid in cash will be refinanced by third-party capital on terms to be agreed. If the DIP facility lenders are required to refinance or roll any portion of the claims into an exit facility, those lenders will receive a premium equal to 3% of the amount rolled/refinanced, payable in new equity.

Pre-bankruptcy ABL claims will be paid in full using the proceeds of the DIP financing.

A total of 21.5% of first-lien claims will be equitized into 24.6% of new equity, with the remaining 78.5% to be rolled into a new second-lien exit facility maturing March 31, 2026. The exit facility interest will be payable in cash and in-kind at various rates over the life of the facility. These creditors will also have rights to participate in an equity rights offering, with holders of first-lien claims and second-lien claims having combined rights to participate in 25% of the rights offering.

Holders of second-lien claims will receive 5.1% of the new equity in the reorganized company, seven-year warrants for 1.5% of the new equity at a $621.2 million enterprise value strike and rights to participate in the equity rights offering.

Unsecured noteholders will receive 0.3% of the new equity, seven-year warrants for 8.5% of the new equity and rights to participate in up to 75% of the rights offering.

Treatment of general unsecured creditors is to be determined, with trade claims expected to be unimpaired.

Existing equity will be canceled and discharged.

Hornbeck is a Covington, La.-based provider of offshore supply vessels primarily in the Gulf of Mexico and Latin America. The company filed bankruptcy on May 19 under Chapter 11 case number 20-32679.

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