Hercules Offshore Inc. filing “prepackaged” bankruptcy

Posted on Thursday, August 20th, 2015 at 8:25 pm    

The Houston based oil company Hercules Offshore Inc. is filing for bankruptcy after the latest round of falling oil prices. The company filed for Chapter 11 bankruptcy Aug. 13 and plans to implement a $1.3 billion debt-for-equity trade with bondholders. The vote from senior bondholders to restructure the debt of the company was practically unanimous.

The approximate worth of Hercules Offshore is between $535 million and $725 million. The bond debt, which makes up most of the liabilities, is estimated at $1.31 billion.

As with several other oil-and-gas companies, the low oil prices have been steadily hurting Hercules Offshore. The company has several assets, such as shallow water drills, that are idle or have been sold below value price. Several of the drilling contracts the company held expired and not renewed. Meanwhile, barrels of gas are selling for about $45 in U.S. markets, down 50 percent from last year.

Hercules Offshore is taking $450 million in new debt financing in order to construct a new rig in Singapore. Trade creditors are receiving their full amount that is owed while shareholders are receiving 3 percent of the equity if they agree to withhold from a lawsuit against the company.

Bankruptcy is a complicated and long-term commitment. Most companies do not have the luxury of a “prepackaged” bankruptcy and need the assistance of an experienced bankruptcy attorney. If your company is considering filing for bankruptcy, contact the Bradford Law Offices, PLLC. For more information on how our services can help you, call our Raleigh office at (919) 758-8879 today.