Valaris Chapter 11 plan confirmation hearing continued to March 3

By Sarah Lizee

Olympia, Wash., Feb. 11 – Valaris plc’s hearing on confirmation of its Chapter 11 plan has been continued to March 3 from Feb. 11, according to a docket entry filed Thursday with the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, the company entered into a second amendment to its restructuring support agreement and backstop commitment agreement to include its revolving credit facility lenders as parties to the agreements, in addition to some holders of its outstanding unsecured notes, according to a Monday press release.

Noteholders representing over 72% of the company’s unsecured notes and bank lenders representing over 88% of the company’s credit facility claims have signed on to support the restructuring.

The company said it expects to emerge with a robust financial foundation via equitization of $7 billion of pre-petition debt, which represents 99% of debt outstanding, and a $520 million capital injection.

The treatment for general unsecured claims is unchanged, with holders receiving payment in full or having their claims reinstated.

Under the terms of the second restructuring support agreement amendment, among other things, the bank lenders will receive their Chapter 11 distributions in either a combination of cash, new ordinary shares of the new parent entity of the company and the right to participate in the rights offering contemplated by the restructuring agreement or entirely in cash and new equity of New Valaris, at their election.

As part of the rights offering, 97.6% of the rights issued will be offered to all record holders of any claim on account of the senior notes, and 2.4% of the subscription rights will be offered to some record holders of credit facility claims.

Additionally, each holder that participates in the rights offering and holdback will receive its pro rata share of 30% of the new equity.

New Valaris will also issue 39% of the new equity to holders of the senior notes and 28.3% of the new equity to holders of claims against Valaris with respect to the credit facility claims.

Finally, all letters of credit outstanding under the fourth amended and restated credit agreement dated as of May 7, 2013 will be replaced or collateralized with cash.

In addition to supporting the plan and second amended restructuring support agreement, some bank lenders also agreed to backstop a portion of the rights offering.

The backstop commitment agreement amendment provides that the participating bank lenders will receive, among other things, 2.4% of the holdback notes and the new secured notes offered in the rights offering.

Valaris is a London-based offshore drilling company. The company filed bankruptcy on Aug. 19, 2020 under Chapter 11 case number 20-34114.

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