Ocean Rig filled for Chapter 15 bankruptcy protection

Ocean Rig drillshipThe rig contractor Ocean Rig filled for Chapter 15 protection in US court Bankruptcy Court for Southern District of New York. The company suffered from liquidity problems and increasing debt, due to prolonged downturn in the industry. The debt of Ocean Rig at the end of 2016 amounted to 3.25 billion USD, but the company succeeded to entered into an agreement with creditors representing over 72% of its debt for restructuring. However, the Chapter 15 will grants a foreign company protection from creditors looking to seize its assets in the country, until completion of the reorganization and business optimization.

Ocean Rig will be deleveraged by an exchange of 3.69 billion USD principal amount of debt for new equity of the company, as well as approximately 288 million USD of cash and 450 million USD of new secured debt.

The existing shareholders will be diluted to an insignificant amount of post-restructuring equity of the company while 9.5% of new equity will be reserved under a new management equity plan.

The Greek company Ocean Rig is an operator of semi-submersible oil rigs and UDW drillships. It has semi-submersibles and four ultra deepwater drill ships. Ocean Rig has areas of operation as of 2012 are Brazil, West Africa, East Africa and the Norwegian sector.