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Hornbeck Offshore Plans to File for Chapter 11 Bankruptcy Protection | Coronavirus

Covington-based Hornbeck Offshore Services Inc. plans to file for Chapter 11 bankruptcy protection soon.

The shipping company told investors it plans to file prepackaged bankruptcy in the Southern District of Texas to reorganize the company.

He recently reached agreements with creditors to forbear several different loans, which were largely due in April.

“The company is in the process of negotiating and finalizing a restructuring support agreement with forbearing creditors on the terms of a consensual balance sheet restructuring during this forbearance period,” according to a Securities and Exchange Commission filing. United States.

The face value of the company’s total debt on its books was more than $1.2 billion as of September 2019, records show.

Hornbeck Offshore expects to file for bankruptcy and reorganization by April 20. Company executives had been negotiating with lenders for months in an attempt to restructure debt without bankruptcy, but the bottom collapsed after the coronavirus pandemic swept the world and the price of crude oil fell to 20 $ per barrel.

“We were working on a consensus plan that would have avoided bankruptcy, but COVID-19 and, more importantly, the OPEC war have been a game-changer,” said James Harp, chief financial officer of Hornbeck Offshore.

The company has about 1,200 employees, with about 150 in Louisiana onshore and the rest offshore. It is considered an essential business, so many workers are still showing up at its Covington offices. Even during bankruptcy, the company does not expect to lay off workers and wants to continue business as usual.

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“We’re very confident that we can emerge and get in and out of bankruptcy fairly quickly,” Harp said. “Our creditors have been very supportive and when the market recovers we will be a viable core business in our industry for the long term. All we need is cash.”

Hornbeck Offshore has not yet filed its fourth quarter or year-end financial reports and has advised the SEC that it has been unable to do so due to ongoing restructuring discussions with lenders. loans.

In the previous quarter, Hornbeck Offshore recorded a net loss of $41.4 million, compared to a loss of $31.1 million in the third quarter of 2018. Meanwhile, its revenue fell to $52.8 million. in the third quarter, compared to $58.4 million a year earlier. The company had $136 million in cash and cash equivalents as of September 2019.

The company’s problems stem from a struggling oil services sector, as customers have faced low oil prices since 2014 and cut their service budgets.

“The COVID-19 pandemic and the recent oil price war initiated by Russia and Saudi Arabia have had a significant negative impact on the offshore oil and gas industry and society,” according to the filings.

Some of the company’s administrative employees have been relocated due to stay-at-home orders as well as the coronavirus.

The company was told in recent months by the New York Stock Exchange that it was at risk of being taken off the public market because its shares traded below $1 per share for at least 30 consecutive days. Shares of the company were trading Thursday at 6 cents per share, down from their 52-week high of $1.48 per share in April 2019.