Ocean Rig gets US approval for refinancing


A U.S. Bankruptcy Court has issued and order giving full force in the U.S. to Ocean Rig’s debt restructuring schemes of arrangement recently sanctioned by the Grand Court of the Cayman Islands.

The deepwater offshore drilling company on Wednesday said the order by the United States Bankruptcy Court for the Southern District of New York means the terms of the restructuring approved by the Cayman Court have therefore been given effect and are enforceable in the United States.

Ocean rig said the schemes affect “only financial indebtedness,” while the operations will continue unaffected.

Trade creditors and vendors will continue to be paid in the ordinary course of business and will not be affected by any of the schemes.

“Once the Restructuring Effective Date has occurred, the Scheme Companies will be substantially deleveraged through an exchange of approximately $3.7 billion principal amount of debt for (i) new equity of the Company, (ii) approximately $288 million of cash, and (iii) $450 million of new secured debt,” Ocean Rig said.

Ocean Rig previously said that Creditors’ meetings had been held for the scheme companies -it and its certain subsidiaries – in the Cayman Islands on August 11, 2017, and the scheme of arrangement proposed by each scheme company obtained an overwhelming level of support from affected creditors. The DFH, DOV and DRH schemes each obtained the approval of 100% of the creditors voting on those schemes and the UDW scheme obtained the approval of 98.51% of the creditors. Only five funds managed by Highland Capital Management LP opposed the UDW Scheme, Ocean Rig said in August.

To remind, Ocean Rig on Tuesday announced a reverse stock split of 1-for-9200 common shares. This means that shareholders will own one Ocean Rig share for every 9200 shares they currently own. No fractional shares will be issued in connection with the reverse split of the issued common stock. This means that shareholders who own less than 9200 shares would be getting less than one full share in the reverse split.

Instead, Ocean Rig said, “shareholders of record who would otherwise hold a fractional share of the company’s common stock will receive a cash payment at a price equal to that fraction to which the shareholder would otherwise be entitled multiplied by the closing price of the company’s common stock on Nasdaq on September 21, 2017,” that is price before the split, as the company’s common stock a split-adjusted basis will begin trading on Nasdaq as of the opening of trading on September 22, 2017.

This means, according to the formula above, that shareholders who have fewer than 9200 shares, will see their shares first converted to less than 1 (fractional amount), and then multiply that amount with the share price of Ocean Rig. More precisely, this means those shareholders will be paid in pennies as Ocean Rig’s current share price is $0.084.

Source: OffshoreEnergyToday.com



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