Each one in plain English, with the numbers worked through for a shareholder.
29 Nov 2018business combination▲ GoodMajor
Ocean Rig shareholders approved the Transocean merger: holders of 86.76% of outstanding shares voted, and 99.99% of those voted in favour. This satisfies the Ocean Rig shareholder-approval condition set for this meeting; the deal still needs the other closing conditions (e.g. Transocean shareholder approval and regulatory clearances). On closing, each Ocean Rig share would be cancelled and converted into 1.6128 new Transocean shares plus $12.75 in cash, and Ocean Rig would become a wholly owned Transocean subsidiary. The shareholder position does not end yet because the merger has not closed.
Ocean Rig set an extraordinary general meeting for November 29, 2018 at 9:00 a.m. in Grand Cayman, where shareholders will vote on the Transocean merger agreement of September 3, 2018. Holders of record at close of business on October 16, 2018 can vote, and the joint proxy statement/prospectus is expected to be sent on or after that date. This continues the merger thread by scheduling the shareholder-approval condition; the filing adds no new deal terms.
Ocean Rig signed a merger agreement on September 3, 2018 with Transocean Ltd.: Ocean Rig would become an indirect wholly owned Transocean subsidiary, and each Ocean Rig share would convert into 1.6128 new Transocean shares plus $12.75 in cash. This is a new thread after the 2017 restructuring and the March 2018 term loan prepayment. Closing needs approval by both companies' shareholders, no material adverse effect, termination of the management services agreements with TMS Offshore Services, Swiss registration of Transocean's capital increase and NYSE listing of the new shares; holders of about 47.9% of Ocean Rig shares (about 43.8 million) have signed voting and support agreements. Ocean Rig owes Transocean a $90m fee in specified cases (e.g. taking a superior proposal), and Transocean owes Ocean Rig $132.5m if antitrust clearances fail or $60m of expenses if Transocean shareholders do not approve; the end date is March 31, 2019, extendable to September 3, 2019.
Ocean Rig prepaid $100 million of its $450 million Senior Secured Term Loan (8.00% interest, maturing September 20, 2024), leaving $350 million outstanding. The CEO, now named as Pankaj Khanna, says repaying at par cuts interest over the remaining term by $52 million. The loan matches the $450 million new secured debt planned in the restructuring, and the filing's reference to a 'recently completed financial restructuring' indicates the schemes did take effect (inference from that wording; the effective date and the treatment of old shareholders are not in this filing).
The U.S. Bankruptcy Court (Southern District of New York) has ordered that the sanctioned UDW, DFH, DOV and DRH schemes have full force and effect in the United States, completing the US recognition step set for this date. The company says it is still working to satisfy or waive the remaining conditions before the schemes become effective, and repeats the planned exchange of about $3.7 billion of debt for new equity, about $288 million of cash and $450 million of new secured debt. The filing does not state how existing shareholders are treated.
The Cayman court has sanctioned the schemes for UDW, DRH, DFH and DOV, and the court orders were filed with the Cayman Registrar, so the 'Lodgment Date' has occurred. This completes the court approval step expected since the creditor votes; a U.S. Bankruptcy Court hearing is set for September 20, 2017 and no objections were pending. The release repeats that about $3.7 billion of debt will be exchanged for new equity of the company, about $288 million of cash and $450 million of new secured debt once the restructuring takes effect; it says nothing on existing shareholders.
Creditors approved all four schemes (UDW, DFH, DOV, DRH) at the August 11, 2017 meetings: UDW by more than 97% in value of those voting, and DFH, DOV and DRH by 100%. This resolves the creditor-vote step set in July, and the DRH vote passed despite the earlier blocking-position dispute. The Cayman court sanction hearing is set for September 4-6, 2017, and the restructuring is expected to take effect towards the end of September if the court approves; the filing does not say what happens to existing shareholders.
The Cayman court has ordered four creditor meetings (UDW, DFH, DOV, DRH) to vote on the schemes on August 11, 2017, with a record date of August 10. If creditors approve, a court sanction hearing is set for September 4, 2017; this is the court authorisation sought in the earlier filings.
Court hearings to authorise the creditor meetings are set to begin July 11, 2017, and creditor support has risen: 94.0% for UDW, 99.8% for DFH, 98.5% for DOV and 81.6% for DRH (up from 57%, which eases the earlier DRH blocking concern). The company expects creditor meetings in early August and the sanction hearing in early September, and the US Chapter 15 hearing was adjourned from July 13 to August 16, 2017. The DRH early consent deadline is extended to June 14.
The schemes of arrangement for Ocean Rig UDW, DFH, DOV and DRH have been formally launched, with the companies telling creditors they will ask the Cayman court for directions hearings to convene creditor votes. The restructuring agreement is backed by about 90% of affected claims at UDW, 99% at DFH, 97% at DOV and 57% at DRH; this continues the DRH dispute from the earlier filing, with DRH now included in the launch. The DRH early consent fee (raised to $3m) deadline is moved to May 29, 2017.
The trigger date under the March 23, 2017 restructuring agreement has occurred, which automatically pushes the deadline to complete the debt restructuring (through Cayman court-supervised 'schemes') to October 31, 2017. The release says about $3.7 billion of debt would be swapped for new equity of the company, about $288 million of cash and $450 million of new secured debt if the schemes are sanctioned. Schemes for UDW, DFH and DOV are going ahead, but a group of Drill Rigs Holdings (DRH) noteholders says it holds a blocking position (over 25%) and will block that scheme as it stands, so DRH may be postponed or placed into official liquidation.
