Houston-based Vantage Drilling’s subsidiary Offshore Group Investment Ltd. (OGIL) filed for bankruptcy last week, in a debt-for-equity deal that will result in a reduced debt of about US$1.45 billion.
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The Titanium Explorer. From Vantage. |
Vantage, OGIL, and its subsidiaries reached an agreement in the US Bankruptcy Court in Wilmington, Delaware, to significantly deleverage OGIL’s capital structure with holders of about $1.45 billion, roughly 59%, of its secured notes and term loans in addition to holders of approximately 90% of its senior secured asset backed loan facility, Vantage said.
As part of the deal, existing term loan lenders and secured bondholders will have the chance to participate in a rights offering for $75 million of new second lien secured financing.
Vantage will hold separate proceedings for winding down the parent holding company in the Cayman Islands.
According to Vantage, OGIL's prepackaged Chapter 11 case will proceed to conclusion separate from Vantage's Cayman Islands proceedings. Any parties holding claims against Vantage directly, including its shareholders, are expected to have their claims addressed as part of the Cayman Islands proceedings. OGIL intends to request Bankruptcy Court confirmation of its plan in mid-January 2016.
"Vantage and OGIL have been working on a path forward to deleverage its capital structure and take advantage of market opportunities with a strong balance sheet in light of market conditions, and we are extremely pleased to have our senior debtholders support the company to accomplish these goals, position ongoing operations for the long-term as well as to provide additional capital to supplement our solid liquidity position," said Paul Bragg, Vantage and OGIL CEO. "The agreement we've reached with our lenders and noteholders will eliminate more than $152 million of annual cash interest expense and position us with a strong, deleveraged balance sheet expected to have more than $242 million of cash on hand."
In July, Vantage acknowledged its connection to the Petrobras Lava Jato scandal. The company used an agent in contract negotiations with the Brazilian giant, Hamylton Padilha, who was cooperating with and made statements to Brazilian authorities regarding the scandal.
About two months later in August, Petrobras terminated a $1.6 billion, eight-year contract with Vantage Drilling for use of the Titanium Explorer ultra deepwater drillship, citing a breach in contract that Vantage strongly disagreed with.
Vantage’s former director, Nobu Su, was the sole owner of the company that owned the Titanium Explorer at the time the alleged bribe was paid.
Vantage, owns a fleet of three ultra deepwater drillships: the Platinum Explorer, Titanium Explorer and Tungsten Explorer, in addition to and four ultra premium jackup drilling rigs.
Vantage's primary business is to contract drilling units, related equipment and work crews primarily on a day rate basis to drill oil and natural gas wells.
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