Offshore Drilling Contractor Completes Reorganization

Offshore Drilling Contractor Completes Reorganization
Valaris Limited has emerged from Chapter 11 bankruptcy.

Valaris Limited (NYSE: VAL) emerged from Chapter 11 bankruptcy on April 30, 2021, eliminating $7.1 billion of debt, the offshore drilling contractor reported Monday.

Last week Valaris CEO and President Tom Burke indicated the reorganization would end soon. The U.S. Bankruptcy Court for the Southern District of Texas approved and confirmed the Valaris Group subsidiary’s reorganization plan on March 3, 2021, Valaris noted Monday in a written statement emailed to Rigzone.

The company filed Chapter 11 last summer.

“Today marks an important milestone as the company emerges from Chapter 11 with a significantly strengthened capital structure,” Burke commented Monday. “The overwhelming support of our noteholders, bank lenders, and voting shareholders has been invaluable. I want to thank everyone for their continued confidence in our business.”

In addition to eliminating $7.1 billion of debt, Valaris’ reorganization injects $520 million of capital into the company through the issuance of $550 million of new secured notes maturing in 2028, pointed out the drilling contractor. The firm noted that, as of April 30, 2021, it had $615 million of available cash, $40 million of restricted cash, and $550 million of debt.

“The last 12 months have been challenging from many perspectives,” continued Burke. “However, I am immensely proud of our employees’ hard work and commitment over this period. Our offshore crews and shore-based staff remain focused on delivering safe, efficient, and reliable drilling services to our customers.”

The close of the reorganization also signaled the end of trading of former U.K. parent company Valaris plc – now called “Old Valaris” – shares on the OTC Pink Marketplace, effective April 28, 2021. Beginning Monday, common stock and warrants of Valaris Limited – the new parent company of Valaris Group – began trading on the New York Stock Exchange under the ticker symbols VAL and VAL WS, respectively, the firm noted.

Valaris pointed out that Burke will remain as president and CEO of Valaris Limited. It also stated the company's new seven-member board of directors includes:

  • Burke
  • Elizabeth Leykum (chair)
  • Anton Dibowitz (effective July 1, 2021)
  • Dick Fagerstal
  • Joseph Goldschmid
  • Deepak Munganahalli
  • Jay Swent.

Valaris noted that its fleet comprises 11 drillships, five semisubmersibles, and 44 jackups. Burke also observed hints of improving conditions in the offshore drilling sector.

“In the current commodity price environment, we are beginning to see the early signs of a recovery in customer demand following the downturn caused by the COVID-19 pandemic,” he said. “With the elimination of more than $7 billion of debt and an injection of significant additional capital, Valaris is best positioned to take advantage of opportunities going forward.”

Valaris’ Chapter 11 exit occurred several days after that of another drilling contractor: Diamond Offshore Drilling, Inc. (OTCMKTS: DOFSQ).

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