Hercules to file for bankruptcy

“Once our financial restructuring is completed, the new capital structure will provide a better foundation for Hercules to meet the challenges in the global offshore drilling market due to the down cycle in crude oil prices and expected influx of newbuild jackup rigs over the coming years,” Hercules president and CEO John T. Rynd said in a statement. The restructuring plan called for Hercules to enter Chapter 11 in July, followed by its noteholders exchanging $1.2 billion in debt for 96.9% of the company’s stock. That will deleverage Hercules’ balance sheet. The noteholders also agreed to support $450 million of new debt to continue construction of the jackup rig Hercules Highlander and other corporate purposes. The company has enough liquidity to meet its obligations to customers and vendors, Rynd said. Hercules has 27 jackup rigs, including the Highlander, and two dozen liftboats. Eleven of its 20 U.S. Gulf jackups are cold stacked. — Kirk Moore

 

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