Valaris Clears Bankruptcy Hurdle

The U.S. Bankruptcy Court for the Southern District of Texas has approved Valaris plc’s (OTC: VALPQ) Chapter 11 prearranged reorganization plan, Valaris reported Wednesday.

The plan will enable Valaris to eliminate $7.1 billion of existing debt and provide the offshore drilling contractor with a $520 million capital injection via the issuance of a $550 million secured note maturing in 2028, the company pointed out in a written statement emailed to Rigzone.

“I am pleased that we have received strong support for the company’s amended plan,” remarked Tom Burke, Valaris’ president and CEO. “This is an important milestone as it clears the path for Valaris to emerge from Chapter 11 early in the second quarter.”

 In addition to garnering court approval, Valaris noted that its plan won the support of approximately 80% of the company’s unsecured noteholders, bank lenders representing 100% of its credit facility claims, and approximately 81% of its voting shareholders.

“The overwhelming support from our noteholders and bank lenders shows their confidence in our go-forward strategy and strength as a company,” continued Burke. “This achievement would not have been possible without the continued dedication and loyalty from our employees, customers, vendors, and other partners.”

Valaris also stated that struck a deal with Daewoo Shipbuilding and Marine Engineering Co., Ltd. (DSME) (KRK: 042660) to amend its two newbuild drillship contracts. The amendments extend the delivery date for each drillship to Dec. 31, 2023, while giving Valaris the option to take delivery early or terminate the contracts on a non-recourse basis, Valaris explained. Also, the drilling contractor noted the estimated final payments for the Valaris DS-13 and Valaris DS-13 vessels will be approximately $119 million and $218 million, respectively.

“We look forward to emerging swiftly with our strengthened capital structure which, combined with our high-quality rig fleet and personnel, positions the company well in a still challenging offshore drilling market,” Burke concluded.

Valaris filed Chapter 11 last August.

To contact the author, email mveazey@rigzone.com. A dedicated website administered by Stretto, Valaris’ claims agent, presents court filings and additional information about the court-supervised proceedings.