Valaris hearing on disclosure statement approval continued to Dec. 30

By Sarah Lizee

Olympia, Wash., Dec. 21 – Valaris plc’s hearing on approval of the disclosure statement for its Chapter 11 plan has been continued to Dec. 30, according to a notice filed Friday with the U.S. Bankruptcy Court Southern District of Texas.

As previously reported, Valaris filed bankruptcy to implement the terms of a restructuring support agreement and backstop commitment agreement reached with roughly 50% of its noteholders.

Valaris said it will undergo a financial restructuring that is intended to reduce its debt load substantially, support continued operations during the current lower-demand environment and provide a robust financial platform to take advantage of market recovery over the long term.

The agreements call for the full equitization of the company’s pre-bankruptcy revolving credit facility and unsecured notes, a fully backstopped rights offering to noteholders for $500 million of new secured notes, the cancellation of existing equity interests in exchange for, under specified circumstances, warrants for post-emergence equity and payment in full in cash of trade claims.

Specifically, according to an 8-K filed with the Securities and Exchange Commission, senior noteholders will receive their share of 34.8% of the new equity and subscription rights to participate in the rights offering, and revolving credit facility lenders will receive a share of 32.5% of new common stock.

Debtor-in-possession lenders will be paid in full in cash.

Holders of 2020 notes, 2022 notes, 4¾% notes, 7 3/8% notes, 2040 notes, 2042 notes and 5.85% 2055 notes will receive a total cash payment of $25 million in connection with settlement of alleged claims against the company.

General unsecured claims will be paid in full or reinstated.

If holders of equity interests vote as a class in support of the restructuring, they will each receive their share of up to 0.01% of the new equity and seven-year warrants to purchase up to 7% of the new equity, with a strike price set at a price per share equal to the value at which the senior noteholders would receive a 100% recovery on their claims including accrued interest up to the filing.

Valaris is a London-based offshore drilling company. The company filed bankruptcy on Aug. 19 under Chapter 11 case number 20-34114.

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