Louisiana-based OSV owner Hornbeck Offshore Services, Inc (HOS) has entered into an agreement with the majority of its creditors that will provide US$75M in new financing prior to submitting a pre-packaged Chapter 11 filing in the US Bankruptcy Court for the Southern District of Texas
One of the largest US-flag OSV owners, HOS expects to complete its bankruptcy restructuring filing before the end of Q2 2020.
The new financing, existing cash on hand and cash generated from operations will be used to support HOS operations during the financial restructuring process. The agreement provides for payment in full of all vendors and employees. The deal also provides access to US$100M in new equity capital after emergence from bankruptcy reorganisation.
HOS expects the pre-packaged Chapter 11 reorganisation to be completed ‘very quickly’ with the support of its creditors.
HOS chairman, president and chief executive Todd M Hornbeck, said, "The Covid-19 pandemic and the recent drop in oil prices due to an acute global supply-demand imbalance have significantly impacted the industries we serve, making an already challenging environment for the company even more difficult.” Mr Hornbeck remarked that “This consensual approach to reorganisation and recapitalisation is in the best long-term interest of our company, as it will enable us to take advantage of new opportunities while continuing to support our customers, retain our employees and pay our vendors."
HOS joins US-based OSV owners Tidewater, Gulfmark Offshore and Harvey Gulf International in filing for reorganisation under Chapter 11 since the oil downturn in 2014.