Pacific Drilling Announces Offering of $700 Million Aggregate Principal Amount of Senior Secured Notes
Pacific Drilling S.A. (OTC: PACDQ) (“Pacific Drilling” or the “Company”)
today announced that a special purpose wholly owned subsidiary (the
“Escrow Issuer”) of the Company intends to offer $700 million aggregate
principal amount of senior secured first lien notes that mature five
years following their issuance, subject to market conditions. The
offering will be exempt from the registration requirements of the
Securities Act of 1933, as amended (the “Securities Act”).
The notes are being offered in connection with the restructuring of
Pacific Drilling as part of the First Amended Joint Plan of
Reorganization filed with the U.S. Bankruptcy Court for the Southern
District of New York on August 31, 2018 (the “Plan”). The net proceeds
of the offering will be funded into an escrow account (the “Escrow
Account”) established and maintained by the Escrow Issuer. If Pacific
Drilling’s proposed Plan is confirmed and certain other conditions are
satisfied on or before December 22, 2018 (the date on which such
conditions are satisfied, the “Escrow Release Date”), the Escrow Issuer
will merge with and into Pacific Drilling and Pacific Drilling will
become the obligor under the notes. On the Escrow Release Date, the
notes will be jointly and severally and fully and unconditionally
guaranteed on a senior secured basis by each of Pacific Drilling’s
restricted subsidiaries (subject to certain exceptions) and will be
secured on a first-priority basis by substantially all of Pacific
Drilling’s assets (subject to certain exceptions). Prior to the Escrow
Release Date, the notes will be general obligations of the Escrow
Issuer, secured only by a lien on the Escrow Account. On the Escrow
Release Date, the net proceeds from the offering will be released from
the Escrow Account to fund a portion of the payments to creditors
provided for under the Plan.
The notes and related guarantees will be offered only to qualified
institutional buyers under Rule 144A of the Securities Act, and to
non-U.S. persons in transactions outside the United States under
Regulation S of the Securities Act. The notes have not been, and will
not be, registered under the Securities Act and may not be offered or
sold in the United States absent registration or an applicable exemption
from, or in a transaction not subject to, the registration requirements
of the Securities Act and other applicable securities laws.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of the
notes in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.
About Pacific Drilling
With its best-in-class drillships and highly experienced team, Pacific
Drilling is committed to becoming the industry’s preferred
high-specification, deepwater drilling contractor. Pacific Drilling’s
fleet of seven drillships represents one of the youngest and most
technologically advanced fleets in the world. Pacific Drilling has its
principal offices in Luxembourg and Houston. For more information about
Pacific Drilling, including our current Fleet Status, please visit our
website at www.pacificdrilling.com.
Forward-Looking Statements
Certain statements and information contained in this news release
constitute “forward-looking statements” within the meaning of the safe
harbor provisions of the Private Securities Litigation Reform Act of
1995, and are generally identifiable by the use of words such as
“anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,”
“intend,” “our ability to,” “may,” “plan,” “predict,” “project,”
“potential,” “projected,” “should,” “will,” “would,” or other similar
words, which are generally not historical in nature. The forward-looking
statements speak only as of the date hereof, and we undertake no
obligation to publicly update or revise any forward-looking statements
after the date they are made, whether as a result of new information,
future events or otherwise.
Our forward-looking statements express our current expectations or
forecasts of possible future results or events, including our future
financial and operational performance and cash balances; revenue
efficiency levels; market outlook; forecasts of trends; future client
contract opportunities; contract dayrates; our business strategies and
plans and objectives of management; estimated duration of client
contracts; backlog; expected capital expenditures; projected costs and
savings; the potential impact of our Chapter 11 proceedings on our
future operations and ability to finance our business; our ability to
complete the restructuring transactions contemplated by our plan of
reorganization; projected costs and expenses in connection with our plan
of reorganization; and our ability to emerge from our Chapter 11
proceedings and continue as a going concern.
Although we believe that the assumptions and expectations reflected in
our forward-looking statements are reasonable and made in good faith,
these statements are not guarantees, and actual future results may
differ materially due to a variety of factors. These statements are
subject to a number of risks and uncertainties and are based on a number
of judgments and assumptions as of the date such statements are made
about future events, many of which are beyond our control. Actual events
and results may differ materially from those anticipated, estimated,
projected or implied by us in such statements due to a variety of
factors, including if one or more of these risks or uncertainties
materialize, or if our underlying assumptions prove incorrect. There can
be no assurances that the above-described transactions will be
consummated on the terms described above or at all.
Important factors that could cause actual results to differ materially
from our expectations include: our ability to consummate the notes
offering described herein and other financing transactions contemplated
by the Plan on terms that will permit us to meet our objectives; the
global oil and gas market and its impact on demand for our services; the
offshore drilling market, including reduced capital expenditures by our
clients; changes in worldwide oil and gas supply and demand; rig
availability and supply and demand for high specification drillships and
other drilling rigs competing with our fleet; costs related to stacking
of rigs; our ability to enter into and negotiate favorable terms for new
drilling contracts or extensions; our ability to successfully negotiate
and consummate definitive contracts and satisfy other customary
conditions with respect to letters of intent and letters of award that
we receive for our drillships; our substantial level of indebtedness;
possible cancellation, renegotiation, termination or suspension of
drilling contracts as a result of mechanical difficulties, performance,
market changes or other reasons; our ability to execute our business
plan and continue as a going concern in the long term; our ability to
obtain Bankruptcy Court approval with respect to motions or other
requests made to the Bankruptcy Court in our Chapter 11 proceedings,
including maintaining strategic control as debtor in-possession; our
ability to confirm and consummate our plan of reorganization in
accordance with the terms of the Plan and the settlement; risks
attendant to the bankruptcy process including the effects of our Chapter
11 proceedings on our operations and agreements, including our
relationships with employees, regulatory authorities, clients,
suppliers, banks and other financing sources, insurance companies and
other third parties; the effects of our Chapter 11 proceedings on our
Company and on the interests of various constituents, including holders
of our common shares and debt instruments; the potential adverse effects
of our Chapter 11 proceedings on our liquidity, results of operations,
or business prospects; the outcome of Bankruptcy Court rulings in our
Chapter 11 proceedings as well as all other pending litigation and
arbitration matters; the length of time that we will operate under
Chapter 11 protection and the continued availability of operating
capital during the pendency of the proceedings; our ability to access
adequate debtor-in-possession financing or use cash collateral; risks
associated with third-party motions in our Chapter 11 proceedings, which
may interfere with our ability to timely confirm and consummate our plan
of reorganization and restructuring generally; increased advisory costs
including administrative and legal costs to complete our plan of
reorganization and other litigation; the risk that our plan of
reorganization may not be accepted or confirmed, in which case there can
be no assurance that our Chapter 11 proceedings will continue rather
than be converted to Chapter 7 liquidation cases or that any alternative
plan of reorganization would be on terms as favorable to holders of
claims and interests as the terms of our Plan; the cost, availability
and access to capital and financial markets, including the ability to
secure new financing after emerging from our Chapter 11 proceedings; and
the other risk factors described in our 2017 Annual Report on Form 20-F
and our Current Reports on Form 6-K available on the SEC’s website at www.sec.gov.
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