Pacific Drilling gets nod to continue paying wages while working on debt restructuring
- Exploration & Production
A U.S. bankruptcy court has granted a relief requested by offshore driller Pacific Drilling which earlier this week filed for Chapter 11 bankruptcy.
The driller on Thursday said the relief was granted by the United States Bankruptcy Court for the Southern District of New York in certain first day motions related to ordinary course business activities.
This means, Pacific Drilling has explained, the approved motions give the company the authority to pay employee wages and benefits without interruption, to use its current cash management system, and to pay certain foreign and critical vendors for goods and services provided prior to the petition date.
Pacific Drilling said all vendors would be paid in full and in cash on normal payment terms for all goods and services provided on or after the petition date.
Paul Reese, Chief Executive Officer of Pacific Drilling, said, “With these approvals, the company will continue normal operations as we implement a comprehensive financial restructuring under the protection of Chapter 11. Importantly, I would like to thank our employees, customers and vendors for working constructively with us during this important period for the Company.”
The offshore drilling company on Monday filed for Chapter 11 Bankruptcy, following a recent decision of bondholders not to extend the bond maturity date.
The owner of a fleet of seven ultra deepwater drillships, said the move would optimize its capital structure pending recovery in the floating rig drilling industry.
The company plans to use the Chapter 11 process to restructure its $3.0 billion in principal amount of outstanding funded debt.
Pacific Drilling said Chapter 11 would provide it a respite from creditor claims in order to explore alternatives to reorganize “in a manner that maximizes the enterprise value of the company and is fair to all stakeholders.”
Offshore Energy Today Staff