Hercules Offshore files for bankruptcy
NEW YORK (AP) — Oilfield services company Hercules Offshore has filed for Chapter 11 bankruptcy protection, the second time it has done so in less than year.
This time, however, the company plans to sell all of its assets to pay off investors. International subsidiaries are not included in the bankruptcy process, but will still be part of the sale process.
Falling oil prices have cut demand for drilling services, prompting many companies in the sector to shutdown rigs and cut workforces.
In August of 2015, Hercules Offshore filed for bankruptcy and emerged in November after restructuring with a new $450 million credit facility. That filing showed that the Houston company had $1.3 billion in debt and $546.3 million in assets, at the time.
Hercules completed its first restructuring in early November.
On November 6, 2015, Hercules completed its initial financial restructuring under Chapter 11 of the U.S. Bankruptcy Code with a new $450 million senior secured credit facility in place. While there has been a slight recovery in crude prices, a barrel broke $50 for the first time this year, there has been tremendous damage in the energy industry.
Under the latest bankruptcy plan, Hercules plans to maintain employee wages and benefits while paying creditors. If approved, shareholders will receive cash recoveries over time, including a payment of $12.5 million upon completion of the bankruptcy process and the sale of assets.