Hercules Offshore, Inc. (Nasdaq: HERO) (the "Company" or "Hercules"), announced on July 13, that it commenced a solicitation of votes for a prepackaged plan of reorganization from holders of its 10.25% senior notes due 2019, 8.75% senior notes due 2021, 7.5% senior notes due 2021, 6.75% senior notes due 2022, 7.375% senior notes due 2018 and 3.375% convertible senior notes due 2038 (the "Noteholders"). Votes on the prepackaged plan must be received by Prime Clerk, the Company's voting agent, by August 12, 2015, unless the deadline is extended. The record date for voting has been set for July 13, 2015. Solicitation materials will be mailed on or about July 13, 2015 to creditors of record that are entitled to vote.
The prepackaged plan of reorganization (the "Plan") provides that claims of trade creditors, suppliers and employees will be paid in full.
As previously disclosed, on June 17, 2015 the Company entered into a restructuring support agreement (the "Agreement") with Noteholders who held approximately 67% of the aggregate outstanding principal amount of the Company's notes. The terms of the consensual financial restructuring would support a substantial deleveraging transaction pursuant to which approximately $1.2 billion of the Company's outstanding notes would be converted to 96.9% of new common equity, and $450 million in new backstop debt financing would be provided, which would fully fund the remaining construction cost of the Hercules Highlander and provide additional liquidity to fund the Company's operations. The Company's current shareholders, despite being substantially "out of the money" as described in the Plan, would have the opportunity to receive their pro rata portion of the remaining 3.1% of the new common equity, as well as certain warrants described in Plan and the Agreement, subject to the requirements of the Plan. The Company and the consenting Noteholders agreed to complete the restructuring through a prepackaged plan of reorganization. Assuming the Company receives the required acceptances, the Company intends to commence a prepackaged Chapter 11 case shortly after the conclusion of the solicitation period.
The Company recommends that Noteholders refer to the information and the limitations and qualifications discussed in the Solicitation and Disclosure Statement, including the attached Plan. Information contained in the Solicitation and Disclosure Statement, including the attached Plan, is subject to change, whether as a result of amendments, actions of third parties or otherwise. There can be no assurances that the Plan will be approved or confirmed pursuant to the Bankruptcy Code.
