Dolphin Drilling creditors to sell Bolette Dolphin drillship, form new mid-water drilling firm

Majority lenders in Oslo-listed offshore drilling contractor Dolphin Drilling’s $2 billion loan are moving forward with reorganization and recapitalization of the company’s drilling business. The proposed deal includes the sale of the Bolette Dolphin drillship and establishment of a new mid-water drilling company.

Bolette Dolphin / Image source: FOE

Lenders under the company’s $2 billion secured credit facility holding more than 78% of the principal amount outstanding have agreed to the reorganization. The majority lenders include Danske Bank, DNB, SEB, and Swedbank, as well as funds advised by Strategic Value Partners LLC and its affiliates.

As agreed among the majority lenders, the drilling recapitalization will include the sale of the drillship drilling unit Bolette Dolphin to refocus Dolphin Drilling’s drilling business on its mid-water fleet. Pareto Offshore and ABG Sundal Collier are appointed as the brokers in the sale process.

The proceeds from the sale will be used to repay the Dolphin Drilling’s debt to the secured lenders.

Also, the agreement entails that the mid-water drilling business of Dolphin Drilling will be transferred to a new holding company, controlled by the secured lenders (NewCo).

NewCo will then assume all secured debt of Dolphin Drilling that is not repaid through the sale of the Bolette Dolphin drillship, and issue shares in NewCo to Dolphin Drilling. The shares will represent 1.5% of the share capital of NewCo, post-restructuring.

The secured lenders will also provide NewCo with new liquidity in the form of a $45 million revolving credit facility.

Following completion of the Drilling Recapitalisation, the key assets of Dolphin Drilling will be the 1.5% shareholding in NewCo, and the assets related to the Harland Wolff shipyard. Dolphin Drilling will have an option to sell its shareholding in NewCo to SVP Global for $2 million.

As for the Harland Wolff shipyard, the situation is challenging and the Harland Wolff business may be sold or be subject to insolvency proceedings.

Dolphin to be liquidated? Ex-Songa CEO to head NeWco

“The board does not expect that any of these alternatives will yield notable value to the company. On this background, the board may propose that the company is to be liquidated upon completion of the Drilling Recapitalisation,” Dolphin Drilling said.

Dolphin also said that the majority lenders have informed it that they will take steps to implement the Drilling Recapitalisation with or without the consent of the other stakeholders, through a solvent liquidation or through a bankruptcy in the company.

In a separate statement, SVP said that once the recapitalization process is complete, Bjørnar Iversen will become CEO of the business. He has previously served as the CEO of Songa Offshore, a driller eventually bought by Transocean.

Also, SVP said that following the closing of the Drilling Recapitalization, Jørgen Peter Rasmussen will be appointed as Chairman of the business. Rasmussen, with more than 30 years’ experience in the oil and gas industry, was previously Chairman of Seawell Limited, Vice Chairman of Sevan Marine, President and CEO of Archer Limited. Between 1982 to 2008 he also served in various President-level roles in both management and operations with Schlumberger Limited.

Offshore Energy Today Staff

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