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Valaris emerges from Chapter 11 free of $7.1bn of debt

Offshore drilling contractor Valaris has completed its financial restructuring and emerged from the Chapter 11 bankruptcy by eliminating $7.1 billion of debt.

Valaris filed for bankruptcy protection in an attempt to restructure its debt, amid a challenging market environment, back in August 2020.

The drilling contractor’s plan of reorganization was approved and confirmed by the United States Bankruptcy Court for the Southern District of Texas on 3 March 2021.

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Valaris Group informed on Monday that the company now moves forward with a strengthened capital structure, eliminating $7.1 billion of debt and securing a $520 million capital injection by issuing $550 million of new secured notes maturing in 2028.

Valaris sees early signs of demand recovery

As of 30 April 2021, Valaris had $615 million of available cash, $40 million of restricted cash, and $550 million of debt.

“Today marks an important milestone as the company emerges from Chapter 11 with a significantly strengthened capital structure. The overwhelming support of our noteholders, bank lenders and voting shareholders has been invaluable”, said Tom Burke, President and Chief Executive Officer of Valaris.

Burke continued, “In the current commodity price environment, we are beginning to see the early signs of a recovery in customer demand following the downturn caused by the COVID-19 pandemic. With the elimination of more than $7 billion of debt and an injection of significant additional capital, Valaris is best positioned to take advantage of opportunities going forward”.

The Valaris Group emerges with the largest fleet of modern, high-specification assets in the industry. The company has 11 drillships, 5 semi-submersibles, and 44 jack-ups.

The common stock and warrants of the new parent company of the Valaris Group started trading on the New York Stock Exchange under the ticker symbols VAL and VAL WS, respectively, at market open Monday, 3 May 2021.

Shares of Valaris plc (the former UK parent company) ceased trading on the OTC Pink Marketplace as of 28 April 2021.

In related news, the rig owner has recently reported it had booked a $910 million loss in the first quarter of 2021 compared to a net loss of $71 million in the fourth quarter of 2020.

The company’s first-quarter 2021 results included a non-cash asset impairment charge of $757 million related to two floaters.