Hornbeck Offshore files for Chapter 11

Hornbeck Offshore Services Inc. filed for bankruptcy today in the Southern District of Texas and will implement a pre-packaged Chapter 11 restructuring support agreement with lenders that was agreed to in April.

Secured lenders hold approximately 83% of the Covington, La.-based offshore service vessel operator’s aggregate secured debt and unsecured noteholders hold approximately 79% of the company’s aggregate unsecured notes outstanding related to a balance sheet restructuring of Hornbeck Offshore. The restructuring will be implemented in U.S. Bankruptcy Court for the Southern District of Texas. Hornbeck Offshore said it will ask a judge to approve the agreement by June 19, according to a report in today’s Wall Street Journal.

The restructuring support agreement calls for a $75 million debtor-in-possession term loan facility provided by existing creditors and permitted use of existing cash on hand and cash generated from operations to support the business during the financial restructuring process. This will enable Hornbeck Offshore to operate in the ordinary course of business without disruption to its customers, vendors and workforce. The agreement provides for payment in full of all vendors and employees.

In addition, the company will have post-emergence access to $100 million of new equity capital through a common stock rights offering, fully backstopped by existing creditors, and the ability to arrange additional post-emergence financings for certain purposes, including strategic initiatives.

In April, the company said that after the Chapter 11 filing it will have sufficient liquidity to continue operations, meet all operational payment obligations and support its business, and will continue to operate in the ordinary course of business without disruption to its customers, vendors and workforce.

“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. The shared objectives of the company and our creditors are to meaningfully reduce the company’s financial leverage on a consensual basis and source new capital to position the company for future growth,” Todd M. Hornbeck, chairman, president and CEO said in a statement in April. “I want to thank our secured lenders and unsecured noteholders for joining together with us on a game plan for an expedited court-supervised financial restructuring process. This consensual approach to reorganization and recapitalization 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.”

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  1. Avatar
    Captain Wade Colclough on

    My $8,000.00 of Hornbeck stock is worth $40.00 as of my last statement. I was told by someone whose opinion I respect that Todd Hornbeck was paid $4,000,000.00 last year. If that is true I feel like I was stabbed in the back.

    • David Krapf

      According to ExecPay.org, Hornbeck Offshore Services CEO Todd M. Hornbeck received $4.6 million in total compensation in fiscal year 2018 — about the same as the previous year. About 75% of Hornbeck’s compensation, or $3.4 million, was in stock awards. Hornbeck also received approximately $478,000 in a non-equity incentive plan, $637,500 in salary and $36,300 in other compensation.

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      Apparently you’ve never been a stock holder of a company that’s gone bankrupt.

      The stock is worthless, usually the stock get converted into a tenth of the amount of the new stock when its reissued. IE 1000 shares are now 100 shares.

      The company keeps right on going with management getting fat bonuses for guiding the company through these tough times. With the added bonus of having a whole bunch of brand new assets basically for free because all the debt has now been discharged.

  2. Avatar

    Current common stock holders get a tax write off. You could ask for the paper certificates you own be sent to you, due to current supply issues toilet paper is still in short supply.

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    Considering a very large amount Hornbeck vessels are laid up and have been for a number of years, putting them out of class, these vessels are, on today’s market, not worth much.
    Hope someone realizes the values Hornbeck puts on them are way out.

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