Use of the word "Scheme" in reference to the Chapt 15 BK filed....
(Not the kinda 'Scheme' we all think when we hear the word...but one can't help to lean that direction when we think about George ;)
Also there should be no surprises to existing shareholders as it's all right there.
Ocean Rig UDW Inc. Reaches Agreement on Comprehensive Deleveraging and Recapitalization Transaction
http://finance.yahoo.com/news/ocean-rig-udw-inc-reaches-124500703.html
MarketwiredMarch 28, 2017
GRAND CAYMAN, CAYMAN ISLANDS--(Marketwired - Mar 28, 2017) - Ocean Rig UDW Inc. ( NASDAQ : ORIG )
•Implementation commences with the appointment of joint provisional liquidators in the Cayman Islands
•Operations to continue unaffected and trade creditors/vendors will continue to be paid in the ordinary course of business
•Company will emerge with the industry's youngest ultra-deep water fleet and a strong balance sheet, poised to take advantage of ongoing industry opportunities
Ocean Rig UDW Inc. ( NASDAQ : ORIG ) ("Ocean Rig" or the "Company"), an international contractor of offshore deepwater drilling services, today announced that it and its subsidiaries Drill Rigs Holdings Inc. ("DRH"), Drillships Financing Holding Inc. ("DFH") and Drillships Ocean Ventures Inc. ("DOV" and collectively, the "Scheme Companies") have entered into a Restructuring Support Agreement (the "RSA") with creditors representing over 72% of Ocean Rig's outstanding consolidated indebtedness for a financial restructuring (the "Restructuring"). The RSA provides that the Restructuring will be implemented by four separate but interconnected schemes of arrangement under Cayman Islands law (the "Company Scheme," the "DRH Scheme," the "DFH Scheme," the "DOV Scheme" and collectively, the "Schemes").
Pursuant to the terms of the RSA, the Scheme Companies presented winding up petitions to the Grand Court of the Cayman Islands (the "Grand Court") on March 24, 2017 and sought the appointment of joint provisional liquidators (the "JPLs") for the purpose of the Restructuring. On March 27, 2017, the Grand Court appointed Simon Appell and Eleanor Fisher of AlixPartners as the JPLs. By virtue of the appointment of the JPLs, provisional liquidation proceedings were commenced in the Cayman Islands (the "Provisional Liquidation Proceedings") and the Scheme Companies are beneficiaries of a moratorium in the Cayman Islands. The JPLs will work together with the Scheme Companies' directors to implement the Restructuring and are anticipated to promote the Schemes alongside the directors on behalf of the Scheme Companies. The Schemes are required to be approved by the Grand Court. In addition, on March 27, 2017, the JPLs (in their capacity as foreign representatives of the Scheme Companies) commenced cases under Chapter 15 of the U.S. Bankruptcy Code for each of the Scheme Companies seeking, among other things, recognition of the Provisional Liquidation Proceedings as foreign main proceedings.
Restructuring Support Agreement
The RSA became effective on March 23, 2017. It requires the Scheme Companies to apply to the Grand Court before, or as soon as practicable after, May 8, 2017 for permission to convene a meeting of creditors to vote on the Schemes. Pursuant to the RSA, the Company will not make any further payments of any kind on or relating to its existing financial indebtedness.
The Schemes will affect only the financial indebtedness of the Scheme Companies and their guarantor affiliates. Operations of the Scheme Companies will continue to be unaffected and trade creditors/vendors of the Scheme Companies will continue to be paid in the ordinary course of business and will not be affected by the Schemes. If conditions of the Schemes are satisfied, the Scheme Companies will be substantially deleveraged through an exchange of approximately $3.69 billion principal amount of debt for (i) new equity of the Company (the "New Equity"), (ii) approximately $288 million of cash (the "Cash Consideration"), and (iii) $450 million of new secured debt (the "New Secured Loans"). More particularly:
(a) In the Company Scheme, the approximately $131 million of claims outstanding in respect of the Company's senior unsecured notes (the "SUNs") and those in respect of the Company's guarantees of the debt facilities of DRH, DFH and DOV (the "Company Guarantees") will be discharged in exchange for New Equity. The New Equity will have a value equal to the asset value of the Company prior to the restructuring of the debt facilities at DRH, DFH and DOV, and will be allocated among the holders of the Company Guarantees and the SUNs pro rata on the basis of the notional amount of the claims of such holders.
(b) If the DRH Scheme is sanctioned, the approximately $460 million of claims outstanding in respect of DRH's senior secured notes (the "SSNs") will be transferred to the Company in exchange for (i) New Equity and (ii) Cash Consideration. The Cash Consideration will be shared pro rata with the DOV Lenders (defined below) and DFH Lenders (defined below). The value of the New Equity provided to the holders of the SSNs will be equal to the asset value of DRH, less the Cash Consideration received by such holders. Holders of SSNs who agree to be bound to the terms of RSA in the manner specified therein by no later than 5:00 pm (New York time) on April 11, 2017 shall be entitled to a pro rata share (allocated in accordance with the amount of the SSNs held by each consenting holder) of an early consent fee of $2.5 million.
(c) In the DOV Scheme and the DFH Scheme, the lenders under DOV's $1.3 billion credit facility (the "DOV Lenders") and the lenders under DFH's $1.9 billion credit facility (the "DFH Lenders") will transfer their loans to the Company in exchange for (i) New Equity, (ii) the New Secured Loans and (iii) Cash Consideration. The Cash Consideration will be shared pro rata among the DOV Lenders, the DFH Lenders and the holders of the SSNs. However, if the DRH Scheme is not sanctioned, the Cash Consideration will be distributed among the holders of the DFH Loans and the DOV Loans only. The New Secured Loans will be shared pro rata among the DOV Lenders and the DFH Lenders. The value of the New Equity provided to the DFH Lenders and the DOV Lenders will be equal to the asset value of DFH and DOV, respectively, less the Cash Consideration and New Secured Loans received by the DFH Lenders and the DOV Lenders. DOV Lenders and DFH Lenders who agree to be bound to the terms of RSA in the manner specified therein by no later than 5:00 pm (New York time) on April 11, 2017 shall be entitled to a pro rata share (allocated in accordance with the amount of the loans held under the DFH and DOV credit facilities by such each consenting DFH Lender and DOV Lender) of an early consent fee of $30 million.
The Company Scheme, the DOV Scheme and the DFH Scheme are all inter-conditional, meaning that for any one of those Schemes to become effective, all three must be sanctioned by the Grand Court. If all four Schemes are sanctioned and become effective, the holders of the SUNs and the beneficiaries of the Company Guarantees will receive approximately 20.9% of the New Equity under the Company Scheme, the holders of the SSNs will receive approximately 2.9% of the New Equity under the DRH Scheme, the DFH Lenders will receive approximately 40.2% of the New Equity under the DFH Scheme, and the DOV Lenders will receive approximately 36% of the New Equity under the DOV Scheme, in each case subject to dilution in respect of New Equity of 9.5% to be reserved under a new management equity plan. If the Schemes are sanctioned, the existing shareholders of the Company will be diluted to an insignificant amount of the post-restructuring equity of the Company.
George Economou, Ocean Rig's Chairman and Chief Executive Officer, commented:
"Ocean Rig, similar to all rig operators, faces a deep and prolonged industry downturn. Given these conditions, Ocean Rig is taking the appropriate steps to allow us to emerge as a much stronger company that can take advantage of opportunities as they emerge. Our entire team at Ocean Rig is wholly committed to the success of the company and looks forward to our emergence from this financial restructuring that will ultimately enable us to better service our customers in the long term."
Court Protection in the Cayman Islands and the United States
As previously noted, on March 27, 2017, the Grand Court appointed the JPLs for the purpose of the Restructuring. By virtue of the Provisional Liquidation Proceedings, the Scheme Companies are beneficiaries of a moratorium in the Cayman Islands. Pursuant to the Order of the Grand Court appointing the JPLs, any creditor of the Company has liberty to apply to the Grand Court at any time to vary or discharge the appointment order, on not less than 14 clear days' notice to the JPLs.
On March 27, 2017, the JPLs commenced Chapter 15 proceedings for the Scheme Companies under the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. Under these proceedings, the Scheme Companies will seek recognition in the United States of the Provisional Liquidation Proceedings in the Cayman Islands as foreign main proceedings under the U.S. Bankruptcy Code. Recognition of the Provisional Liquidation Proceedings as foreign main proceedings will result, inter alia, in the imposition of a stay of virtually all actions against the Scheme Companies and their property within the territorial jurisdiction of the United States for the duration of the Chapter 15 proceedings. Subsequently, the JPLs will seek an enforcement order recognizing and giving effect to the Schemes in the United States if and when the Schemes are sanctioned by the Grand Court. Recognition of the Schemes and the subsequent enforcement order by the U.S. Bankruptcy Court will result, inter alia, in a permanent injunction on creditors taking any actions in the United States against the Scheme Companies that would be in contravention to the terms of the Schemes.
Simon Appell, a JPL and foreign representative of the Scheme Companies said:
"The appointment of the JPLs will give the Grand Court comfort that the affairs of the Scheme Companies will be subject to the supervision of independent office holders. Our role will be to consider the Restructuring and, if appropriate, to promote the Schemes on behalf of the Scheme Companies and help ensure that all creditors are treated fairly." He added, "The Chapter 15 proceedings are also an important step for implementing a successful restructuring of the Company, as recognition of the Provisional Liquidation Proceedings as foreign main proceedings in the United States will stay creditor actions against the Scheme Companies in the United States. In addition, an order of the U.S. Bankruptcy Court giving effect to the Schemes in the United States, should they be sanctioned by the Grand Court, will ensure that the Restructuring will be enforceable in the United States."
Additional Information
Ocean Rig has retained Prime Clerk LLC as the Information Agent for the purposes of the Restructuring. Copies of the RSA and further information on the Ocean Rig group can be obtained from Prime Clerk LLC:
Email:
oceanrigteam@primeclerk.com
Telephone:
(855) 631-5346 (United States and Canada toll-free)
(917) 460-0913 (international)
Mailing Address:
Ocean Rig Processing
c/o Prime Clerk LLC
830 Third Avenue, 3rd Floor
New York, NY 10022
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