Valaris, the world’s largest offshore rig operator, has received approval from a U.S. bankruptcy court for its prearranged plan of reorganization filed as part of 2020 chapter 11 voluntary bankruptcy, The Maritime Executive reported. Last August, Valaris reached a deal with half of its bondholders to reduce its debt and finance its continuing operations through the bankruptcy process. The bankruptcy plan will eliminate $7.1 billion of existing debt and will provide Valaris with a $520 million capital injection through the issuance of a secured note maturing in 2028. The plan received support from approximately 80 percent of the company’s unsecured noteholders and bank lenders representing all of the company’s credit facility claims. Also, approximately 81 percent of the company’s voting shareholders voted to accept the plan. Valaris has also reached an agreement with Daewoo Shipbuilding & Marine Engineering Co. to amend its two newbuild drillship contracts. The delivery dates are being extended to December 31, 2023, while the company has the option to take delivery early or terminate the contracts on a non-recourse basis. Final payments for the VALARIS DS-13 and VALARIS DS-14 are estimated to be approximately $119 million and $218 million. Formed in 2019 through the combination of Ensco and Rowan Drilling, Valaris became the leader in the industry at a time when the ultra-deepwater market was continuing to show strong weakness from the collapse in the price of oil. The company began efforts to “right-size and streamline the organization,” but the substantial downturn in the sector, and later the impact of the pandemic, forced the company to use a bankruptcy filing to future restructure its operations to lower operating costs and its debt.
