Pacific Drilling Expects Ch11 Emergence by End 2020
Pacific Drilling S.A. (OTC: PACDQ) has announced that the United States Bankruptcy Court for the Southern District of Texas confirmed the First Amended Joint Plan of Reorganization of Pacific Drilling S.A. and its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code.
The company’s chief executive officer, Bernie G. Wolford, said the court’s confirmation of Pacific Drilling’s plan represents an important milestone in the company’s progress towards emergence by year-end with a fully de-levered balance sheet “and the capacity to deliver world class drilling services with our fleet of 6th and 7th generation drillships”.
As part of its confirmed plan, Pacific Drilling will de-lever its balance sheet by eliminating over $1 billion of funded debt obligations and will have access to additional liquidity to operate going forward with approximately $100 million in cash on hand at emergence and an undrawn $80 million senior secured delayed draw term loan exit facility.
On October 30, Pacific Drilling announced that it had entered into a restructuring support agreement with the largest holders of the company’s outstanding bond debt and filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas.
“Since the beginning of 2020, both the global health crisis caused by Covid-19 and the failure to reach international agreement on oil production cuts has caused significant disruption in economies and markets, including a substantial decline in the price of oil,” Pacific Drilling states in a dedicate restructuring page listed on its website.
“The impact of these market conditions on Pacific Drilling’s business has been direct and significantly negative, resulting in a dramatic reduction in contract drilling demand,” the company adds.
In the statement, the company notes that it has adequate liquidity to ensure that it can purchase supplies, maintain its assets and pay its employees during its restructuring process.
Pacific Drilling delivers deepwater drilling services in the oil and gas sector. The company currently has seven modern drillships, according to its website.
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