Orrick is advising Cayman Islands-based offshore drilling contractor Ocean Rig UDW in its comprehensive deleveraging and recapitalization. The company is seeking to implement the transaction pursuant to four interrelated schemes of arrangement in the Cayman Islands. If sanctioned by the Cayman Court, the Company and its Marshall Islands subsidiaries, Drill Rigs Holdings Inc., Drillships Financing Holding Inc. and Drillships Ocean Ventures Inc. (collectively, the “Scheme Companies) will exchange approximately $3.7 billion principal amount of debt for new equity and approximately $740 million in cash and new secured debt. Orrick is advising on all aspects of the restructuring, including the terms of the schemes of arrangements pending before the Grand Court in the Cayman Islands and in connection with the prosecution of ancillary proceedings in the United States pursuant to Chapter 15 filing in the U.S. Bankruptcy Code.
Severely affected by the deep and prolonged oil and gas industry downturn, the Scheme Companies entered into a Restructuring Support Agreement (RSA) with a core creditor group on March 23, 2017 which allowed them to pursue provisional liquidation and scheme of arrangement proceedings under the supervision of joint provisional liquidators (JPLs) appointed by the Cayman court. To protect against the threat of hostile action in the U.S. by dissenting creditors, the Scheme Companies commenced ancillary proceedings in the Southern District of New York and obtained injunctive relief precluding creditors from proceeding against the Scheme Companies during the pendency of the Cayman proceedings. Subject to the sanction of the schemes of arrangement by the Cayman Court, the Scheme Companies will seek an order from the U.S. giving full force and effect to the schemes of arrangement in the U.S.
Bill Haft commented that “this significant debt restructuring will help our client to emerge as one of the financially strongest companies in this sector, well positioned to weather adverse market conditions for several years and seize on new market opportunities.” Orrick client George Economou, Ocean Rig’s Chairman and Chief Executive Officer, said in a statement, “Our entire team at Ocean Rig is wholly committed to the success of the company and looks forward to our emergence from this financial restructuring that will ultimately enable us to better service our customers in the long term.”
The Orrick team advising Ocean Rig is led by Bill Haft and includes Evan Hollander, Stephen Phillips, Scott Morrison, Ron D’Aversa, Doug Mintz, Peter Rooney, Stephen Ashley, Gillian Smith, Mitch Pahl, Ayanna Lewis-Gruss, Courtney Mitchell, Jack Mead, Monica Perrigino, Ken Marx, Peter Amend, Debra Felder, Siobhan Sheridan, Amy Roper, David Litterine-Kaufman, Danny Rubens, Emmanuel Fua, Jason Ervin, Daria Loshkareva and others.