HOUSTON, Dec. 12, 2018 /PRNewswire/ -- Parker
Drilling Company (NYSE: PKD) today announced that it and its
material U.S. subsidiaries (collectively, "Parker" or the
"Company") have entered into a restructuring support agreement
("RSA") with holders (the "Consenting Stakeholders") of the
Company's securities, including a significant amount of its 7.50%
Senior Notes due 2020 and 6.75% Senior Notes due 2022
(collectively, the "Notes"), outstanding preferred stock and
outstanding common stock. The transaction contemplated under the
RSA is expected to strengthen the Company's financial foundation
and position it to capitalize on further opportunities in the
market.
To implement the terms of the RSA, Parker has voluntarily filed
for Chapter 11 protection in the U.S. Bankruptcy Court for the
Southern District of Texas.
Parker's non-U.S. subsidiaries and certain U.S. subsidiaries are
excluded from the filing and will not be affected. Parker intends
to seek confirmation of a pre-arranged Plan of Reorganization
("Plan"). Importantly, members of the Consenting Stakeholders have
indicated their support for the proposed Plan.
The Company anticipates that its cash flow and existing
liquidity will be sufficient to support global operations during
this period and has further augmented liquidity with access to
$50 million in debtor-in-possession
("DIP") financing. The lenders under the DIP financing have also
committed to fund an exit facility of $50
million, which amount may be increased following
emergence.
The Company's proposed Plan, which is subject to Court approval,
reduces approximately two-thirds of funded debt and injects
$95 million of new, fully committed
equity capital through a backstopped rights offering. It also
contemplates the issuance of a new $210
million Second-Lien Term Loan due 2024 to satisfy the
remaining existing Notes. Current preferred equity holders, as well
as common equity holders if the class votes to approve the Plan,
will receive reorganized equity and warrants.
Importantly, the Plan and requested first day relief contemplate
that vendors and other unsecured creditors who continue to work
with the company on existing terms will be paid in full and in the
ordinary course of business. All existing customer and vendor
contracts are expected to remain in place and be serviced in the
ordinary course of business.
"Our operational results have continued to improve this year,
and we anticipate new opportunities for profitable growth across
our drilling and rental tools businesses. The steps we are
announcing today will ensure that we have the appropriate capital
structure to take advantage of these opportunities to strategically
grow our assets, our global footprint, and our suite of products
and services," said Gary Rich,
Chairman, President and Chief Executive Officer. "We are confident
that by resolving our legacy balance sheet issues, we will enable
Parker to continue executing a strategy to build greater scale in
core markets and expand strategic offerings, such as our U.S. Well
Services, while strengthening our drilling and rental tools
businesses. We expect these efforts to drive additional
efficiencies while providing greater flexibility and more options
for customers over the long term.
"Throughout this process, our firm commitment remains to provide
our customers with safe, reliable and efficient operations, as
always. Customers should see no changes to our products and
services, and we appreciate their continued support while we
complete this restructuring," Rich continued. "I also want to thank
our suppliers, whose partnership will remain vital during and after
this process. We have worked closely with the Consenting
Stakeholders and appreciate their clear commitment to the long-term
success of the business.
"Finally, on behalf of the entire Board of Directors, I want to
extend my sincere thanks to our talented employees, whose
commitment to serving our customers with operational excellence and
integrity has not waivered, despite a prolonged industry downturn.
I am confident that the strength of our complementary business
lines, combined with a solid financial platform, will position
Parker to lead the industry as market conditions improve," Rich
concluded.
The Company intends to continue to pay employee wages and
benefits as usual, and to pay trade creditors in full and in the
ordinary course of business. Employees, customers and vendors
should see minimal interruption through this process.
The existing management team is expected to remain in place, and
the Company expects to complete the restructuring process in the
first quarter of 2019.
Kirkland & Ellis LLP is serving as legal advisor to Parker
in connection with the restructuring. Moelis & Company is
serving as Parker's investment banker, and Alvarez & Marsal is
serving as its financial advisor. Akin Gump Strauss Hauer &
Feld LLP is serving as legal advisor to the Consenting
Stakeholders, and Houlihan Lokey is
serving as financial advisor to the Consenting Stakeholders.
Additional information about the restructuring can be found at
https://cases.primeclerk.com/parkerdrilling or toll-free
number, +1.855.631.5345, or +1.347.338.6451 internationally. In
addition, the RSA, Plan and associated materials are included on a
Current Report on Form 8-K filed with the Securities and Exchange
Commission today.
Cautionary Statement
If the Company fails to comply with the continued listing
standards of the NYSE, including a failure to maintain an average
market capitalization of at least $15
million over a 30 trading-day period, the NYSE may
immediately suspend trading and commence delisting of the Company's
common shares. Upon any such suspension and delisting, the Company
expects that its common shares will begin trading on the OTC Pink,
which is operated by OTC Markets Group Inc.
This press release contains certain statements that may be
deemed to be "forward-looking statements" within the meaning of the
Securities Act and the Exchange Act. All statements in this press
release other than statements of historical facts addressing
activities, events or developments the Company expects, projects,
believes, or anticipates will or may occur in the future are
forward-looking statements. These statements are based on certain
assumptions made by the Company based on management's experience
and perception of historical trends, current conditions,
anticipated future developments and other factors believed to be
appropriate. Although the Company believes its expectations stated
in this press release are based on reasonable assumptions, such
statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the control of the Company,
that could cause actual results to differ materially from those
implied or expressed by the forward-looking statements. These
statements include, but are not limited to, statements about
anticipated future financial or operational results, the Company's
financial position, and similar matters. These statements are based
on certain assumptions made by the Company based on management's
experience and perception of historical trends, current conditions,
anticipated future developments and other factors believed to be
appropriate. These include risks relating to changes in worldwide
economic and business conditions, fluctuations in oil and natural
gas prices, compliance with existing laws and changes in laws or
government regulations, the failure to realize the benefits of, and
other risks relating to, acquisitions, the risk of cost overruns,
our ability to refinance our debt and other important factors, many
of which could adversely affect market conditions, demand for our
services, and costs, and all or any one of which could cause actual
results to differ materially from those projected. For more
information, see "Risk Factors" in the Company's Annual Report
filed on Form 10-K with the Securities and Exchange Commission and
other public filings and press releases. Each forward-looking
statement speaks only as of the date of this press release and the
Company undertakes no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise.
About Parker
Drilling
Parker
Drilling provides drilling services and rental tools to the
energy industry. The Company's Drilling Services business serves
operators in the inland waters of the U.S. Gulf of Mexico utilizing Parker Drilling's barge rig fleet and in select
U.S. and international markets and harsh environment regions
utilizing Parker-owned and customer-owned equipment. The Company's
Rental Tools Services business supplies premium equipment and well
services to operators on land and offshore in the U.S. and
international markets. More information about Parker Drilling can be found on the Company's
website at www.parkerdrilling.com.
Contact:
Nick
Henley
Director, Investor Relations
(+1) (281) 406-2082
nick.henley@parkerdrilling.com
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SOURCE Parker Drilling Company