Parker Drilling provides details for amended plan of reorganization

By Sarah Lizee

Olympia, Wash., March 11 – Parker Drilling Co. provided details of the amended plan of reorganization that was confirmed on March 7 by the U.S. Bankruptcy Court for the Southern District of Texas in an 8-K filing with the Securities and Exchange Commission.

The company said it will issue new common stock to certain holders of claims against and interests in Parker, and its shares of existing common stock outstanding prior to the effective date will be cancelled. As of March 6, there were 9,382,493 shares of Parker’s existing common stock outstanding.

Under the plan, holders of claims arising from non-funded debt general unsecured obligations will receive payment in full in cash.

Holders of the 7½% senior notes due 2020 will receive their pro rata share of 34.3431% of the common stock of reorganized Parker, subject to dilution; $92,571,429 of a new second-lien term loan; the right to purchase 24.2915% of the new common stock under a rights offering; and cash sufficient to satisfy expenses owed to the trustee of the notes.

Holders of the 6¾% senior notes due 2022 will receive their pro rata share of 62.9069% of the new common stock, subject to dilution; $117,428,571 of the new second-lien term loan; the right to purchase 38.8664% of the new common stock under the rights offering; and cash sufficient to satisfy expenses owed to the trustee of the notes.

Holders of the 7¼% series A mandatory convertible preferred stock will receive their pro rata share of 1.1% of the new common stock, subject to dilution; the right to purchase 14.7369% of the new common stock under the rights offering; and 40% of the warrants to acquire an aggregate of 13.5% of the new common stock.

Holders of Parker’s existing common stock will receive their pro rata share of 1.65% of the new common stock, subject to dilution; the right to purchase 22.1052% of the new common stock in the rights offering; and 60% of the new warrants.

Holders of claims arising from non-funded debt general unsecured obligations will be paid in full in cash.

The plan is expected to be funded with exit financing that includes the following:

• $50 million under a new senior secured asset-based revolving credit facility that has the ability to raise incremental loans in an aggregate principal amount of up to an additional $75 million;

• $210 million under the new second-lien term loan, none of which is new money, and which refinanced a portion of the outstanding amount of the 2020 notes and the 2022 notes; and

• $95 million in proceeds from the rights offering, backstopped by the backstop commitment parties.

Parker said it expects to complete its restructuring and emerge from Chapter 11 protection later this month.

Kirkland & Ellis LLP is serving as legal adviser to Parker in connection with the restructuring. Moelis & Co. is serving as Parker’s investment banker, and Alvarez & Marsal is serving as its financial adviser.

Parker Drilling is a Houston-based provider of drilling services and rental tools to the energy industry. The company filed bankruptcy on Dec. 12, 2018 under Chapter 11 case number 18-36958.

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