Hornbeck Offshore emerges from bankruptcy

U.S. offshore vessel operator Hornbeck Offshore has emerged from bankruptcy under its joint prepackaged Chapter 11 plan of reorganization.

Hornbeck’s MPSV Iron Horse; Source: Hornbeck
Hornbeck Offshore
Hornbeck’s MPSV Iron Horse; Source: Hornbeck

Hornbeck Offshore entered into a support agreement for comprehensive balance sheet restructuring back in April 2020.

By the end of June, the company received approval for its reorganization plan from the U.S. District Court for the Southern District of Texas.

According to Hornbeck’s update on Friday, the effective date of its completion of reorganization was 4 September 2020.

The reorganization plan implemented the restructuring support agreement negotiated with the company’s lenders and noteholders.

“The quick completion of our reorganization and emergence from Chapter 11 is a significant achievement, particularly given the currently very challenging economic environment”, said Todd M. Hornbeck, Chairman, President and CEO of Hornbeck Offshore Services.

Pursuant to the plan, all general unsecured creditors, including the company’s trade creditors and vendors, were paid in full in the ordinary course of business; the company’s debtor-in-possession financing was converted into a new senior secured exit facility; all of the company’s pre-petition secured loans and unsecured senior notes were cancelled in exchange for new secured debt, new equity, and new equity rights (or cash, if applicable) as of the effective date; and all of the company’s pre-petition equity interests were extinguished as of the effective date.

In addition, the company closed on the common stock rights offering contemplated by the plan, which resulted in a $100 million cash infusion of new equity capital led by the Special Opportunities Funds of Ares Management, as well as funds managed by Whitebox Advisors and Highbridge Capital Management.

“Post-emergence, we have clear alignment with a strong and well-capitalized group of lead shareholders on a shared vision for the company’s future”, continued Hornbeck.

New board of directors

As part of the plan, a new board of directors was appointed by the company.

The new board of directors is comprised of Todd M. Hornbeck (Chairman), Evan Behrens, Kurt M. Cellar, former Louisiana Governor Bobby Jindal, Kevin O. Meyers, Ph.D., Admiral John Richardson, USN (Ret) and John T. Rynd.

The company also announced that Larry D. Hornbeck has been named Chairman Emeritus.

Hornbeck added: “We are pleased to have a distinguished new board whose members provide deep expertise and vision across the spectrum of energy, business, finance and government issues we expect to face in the years ahead”.