Struggling offshore driller Ocean Rig UDW has amended its credit facility signed with DNB Bank in February 2015 for up to $475 million.

To remind, the original loan deal was signed by Ocean Rig’s subsidiary Drillship Alonissos Shareholders, and the owner of the Ocean Rig Apollo drillship, with the cash intended to be used to partially finance the Ocean Rig Apollo drillship which was delivered early in 2015.

The rig had worked for French oil firm Total until February 2016, when the oil major decided to cancel the drilling contract. As per the contract, Ocean Rig said it was entitled to a termination fee that varies from 50% to 95% of the operating rate that will be payable monthly until April 2018.

Under the credit facility, Ocean Rig was required to find a new satisfactory drilling contract by May 21, 2016. Since it failed to find a new drilling contract for the Ocean Rig Apollo, the company was then required under the credit facility to make a mandatory prepayment of approximately $145.9 million by August 22, 2016.

However, Ocean Rig on Thursday, September 1, said it had reached an arrangement to “amend and restate” the credit facility.

Under the arrangement, the company has been released from its guarantee under the loan agreement. Also, the amount of mandatory prepayment required to be made due to the termination of drilling contract for the Ocean Rig Apollo with Total has been reduced. No details on the amount of reduction were shared.

Maybe the most interesting part, under the new deal, Ocean Rig has transferred the ownership of the Drillship Alonissos Owners Inc., as the owner of the Ocean Rig Apollo, along with the drillship, to a trustee.

Ocean Rig said that the company has been given the option to purchase the shares of Drillship Alonissos Owners Inc. upon satisfaction of certain conditions.

Commenting on the deal, Norwegian analysts Pareto Securities said: “Too few details have been provided to make a full assessment of the deal, however, lenders are likely in a fairly good position and able recover the majority of their outstanding amount through a pre-payment and termination fees from Total, while Ocean Rig keeps any upside and simplifies the capital structure ahead of the expected restructuring.”

Offshore Energy Today Staff

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