LONDON, UK / ACCESSWIRE / September 25, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Ocean Rig UDW Inc. (NASDAQ: ORIG), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/'symbol=ORIG. The Company announced on September 22, 2017, that it has completed the restructuring of the Company and its subsidiaries, Drill Rigs Holdings Inc. (DRH), Drillships Financing Holding Inc. (DFH), and Drillships Ocean Ventures Inc. (DOV) as per the Schemes of arrangement (Schemes) sanctioned by The Grand Court of the Cayman Islands. The US Bankruptcy Court for the Southern District of New York on September 20, 2017, had issued an order granting comity and giving full force and effect to the Schemes in the United States. Ocean Rig and its Subsidiaries have been referred to as "Scheme Company(s)". As such the Restructuring Effective Date has already occurred and the Schemes have been implemented. Implementation of the Schemes will allow Ocean Rig to come out of bankruptcy. For immediate access to our complimentary reports, including today's coverage, register for free now at:
http://protraderdaily.com/register/
At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on ORIG. Go directly to your stock of interest and access today's free coverage at:
http://protraderdaily.com/optin/'symbol=ORIG
Commenting on the Restructuring, George Economou, Chairman and CEO of Ocean Rig, said:
"I thank the Joint Provisional Liquidators, our advisors and our financial creditors for the tremendously hard work required to implement a complex restructuring of this nature. We have been supported throughout by our clients, employees, and vendors and, having been placed on firm financial footing, Ocean Rig looks forward to focusing back on its underlying business."
The Scheme
Each of the Scheme Company's restructuring is governed by the laws of Cayman Islands. The Schemes will impact only the financial indebtedness and not the operations of the Company(s), which will continue normally. Creditors and vendors will continue to receive payments as per current arrangement and will not be affected by the implementation of the Schemes. Accordingly, since the Restructuring Effective Date has already occurred, the Scheme Companies have been substantially deleveraged by exchanging principal debt of approximately $3.7 billion, including accrued interest for new equity of the Company. This exchange translates to approximately $288 million in cash and $450 million of new secured debt. All the creditors of the Scheme Companies who have completed the necessary documentation and submitted them by end of working hours on September 13, 2017, have received or are in the process of receiving the entitled consideration. This does not include creditors who have opted to receive New Non-Marginable Shares.
The estimated and projected financials based on the Scheme as on September 30, 2017, is as follows:
- Ocean Rig will have total cash of at least $690 million, including about $20 million restricted cash associated with Ocean Rig Apollo.
- The Company will have assets of $2.9 billion based on book value, which includes $570 million towards newbuilding installments and about $650 million for Ocean Rig Apollo.
- The total debt will be approximately $567 million, including about $117 million debt for Ocean Rig Apollo.
- Ocean Rig would have an estimated backlog of about $1.2 billion, including about $109 million in termination fees associated with Ocean Rig Apollo.
The EGM and its Agenda
The Company has scheduled the Extraordinary General Meeting (EGM) of Shareholders on November 03, 2017. The decisions regarding steps that are lined up for the Company to emerge from bankruptcy will be taken up for discussion and voting. Some of the items on the agenda include a reduction in share capital and number of shares after the restructuring, new credit agreement with borrowers and guarantors, Management Service agreement with TMS Offshore Services Ltd (TMS), Second Amended and Restated Memorandum and Articles of Association of the Company, etc.
Reduction in Share Capital
Ocean Rig's issued and outstanding Common shares have already been reduced substantially following the reverse stock split of 1 share for every 9,200 shares, announced on September 19, 2017. Those creditors who opted to receive New Non-Marginable Shares in lieu of common shares as part of the Scheme will receive the same after the decision is approved in the EGM on the matter. These New Non-Marginable Shares will be class B convertible common shares with par value of $0.01 for each share and will not be listed on any securities exchanges.
New Credit Arrangement
As per the Scheme, Ocean Rig and some of its subsidiaries, who are acting as borrowers and guarantors, entered into a new credit agreement as on September 22, 2017. As per this new credit agreement, the creditors have been given first priority lien on all existing and newly acquired assets of the borrowers and guarantors. This includes a $450 million senior secured term loan with 8% interest and a maturity date of September 20, 2024.
Management Services Agreement with TMS Offshore
As part of the restructuring agreement, Ocean Rig and its each of its vessel-owning subsidiaries have entered into a Management Services Agreement (MSA) with TMS. The MSA is effective September 22, 2017. As per the MSA, TMS will provide certain management services related to the Company drilling units, including but not limited to commercial, financing, legal and insurance services. The Company will pay an annual fee of approximately $15.5 million plus an additional $10 million on meeting certain performance-based milestones. This fee does not include expenses incurred by TMS while acting as manager. TMS is also eligible for 1% commercial fee on all earnings from existing or new drilling contracts after the commencement of the MSA. The MSA has a termination fee clause wherein Ocean Rig can terminate the contract by paying $30 million as "Convenience Termination Fee".
Amended and New Memorandum and Articles of Association
The Second Amended and Restated Memorandum and Articles of Association of the Company will be presented to the shareholders during the EGM for approval and voting. After the amended and new Articles is approved by shareholders, Ocean Rig's Board of Directors will have seven directors out of which three directors will be appointed by certain significant Lenders. These lenders would receive the appointment rights as per the provisions of the amended and new Articles. The new and amended Articles will have provision wherein the Company cannot take certain decisions without the approval of the majority of the Lender Directors.
About Ocean Rig
Ocean Rig is an international offshore drilling contractor providing oilfield services for offshore oil and gas exploration, development and production drilling, and specializing in the ultra-deepwater and harsh-environment segment of the offshore drilling industry. The Company owns and operates 13 offshore ultra-deepwater drilling units, which includes 2 ultra-deepwater semisubmersible drilling rigs and 11 ultra-deepwater Drillships. Two ultra-deepwater Drillships are expected to be delivered one in FY17 and one in FY18.
Last Close Stock Review
At the closing bell, on Friday, September 22, 2017, Ocean Rig UDW's stock skyrocketed 31900.00%, ending the trading session at $24.00. A total volume of 166.83 thousand shares have exchanged hands. The Company's stock price skyrocketed 14660.15% in the last three months, 3200.78% in the past six months, and 2886.19% in the previous twelve months. Moreover, the stock soared 1279.31% since the start of the year. The stock currently has a market cap of $3.30 billion.
Pro-Trader Daily:
Pro-Trader Daily (Pro-TD) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and Canadian stocks. PRO-TD has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles, and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.
PRO-TD has not been compensated; directly or indirectly; for producing or publishing this document.
PRESS RELEASE PROCEDURES:
The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third party research service company (the "Reviewer") represented by a credentialed financial analyst [for further information on analyst credentials, please email contact@protraderdaily.com. Rohit Tuli, a CFA® charter-holder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by PRO-TD. PRO-TD is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.
NO WARRANTY
PRO-TD, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. PRO-TD, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, PRO-TD, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.
NOT AN OFFERING
This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither PRO-TD nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://protraderdaily.com/disclaimer/.
CONTACT
For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:
Email: contact@protraderdaily.com
Phone number: (917) 341.4653
Office Address: Mainzer Landstrasse 50 Frankfurt am Main, Germany 60325
CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
SOURCE: Pro-Trader Daily
