Posted August 6, 2020
Offshore drilling contractor Noble Corporation has filed for Chapter 11 bankruptcy protection to restructure its debt following a “severe downturn in commodity prices which has been compounded by the Covid-19 pandemic”.
Noble Corporation said that it entered into a restructuring support agreement with two ad hoc groups of the largest holders of the company’s outstanding bond debt
According to the company, this will significantly deleverage the company’s balance sheet and position Noble Corp. for long term growth.
The agreement outlines, among other things, a comprehensive plan for the elimination of all of the company’s bond debt, which currently represents over $3.4 billion of debt, through the cancellation and exchange of debt for new equity in the reorganized company.
Noble Corp.’s major bondholders also agreed to invest $200 million of new capital in the form of new second-lien notes.
Following the restructuring, the company expects to emerge with an enhanced liquidity position supported by a new $675 million secured revolving credit facility to be provided by its current syndicate of revolving credit facility lenders, with JPMorgan Chase Bank as an administrative agent.
To implement the restructuring transaction, the company and selected subsidiaries voluntary filed petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas.
The restructuring will be implemented through a plan of reorganization that Noble Corp. expects to be confirmed by this fall, allowing emergence from Chapter 11 before year-end.
The company has sufficient capital to fund its worldwide operations and does not require additional post-petition financing at this time.
Noble will continue to operate as normal and without interruption for the duration of the restructuring.
Robert Eifler, president and CEO of Noble Corporation, said: “[…] Noble has been affected by the severe downturn in commodity prices which has been compounded by the Covid-19 pandemic.
“After many months exploring our strategic options, we concluded that a substantial deleveraging transaction implemented through a Chapter 11 filing, supported by our largest creditors, provides the best outcome for Noble and our stakeholders.
“Our improved balance sheet and liquidity position will enable us to further invest in our assets, customer relationships and our people“.