PARAGON OFFSHORE PLC

PARAGON OFFSHORE PLC terminated the registration of a class of securities, ending its reporting obligation for them.

listing compliance notice

The confirmed chapter 11 plan took effect on July 18, 2017, and Paragon Offshore plc (in administration) emerged from bankruptcy. Substantially all its assets were moved to a new Cayman Islands company, Paragon Offshore Limited, whose shares went to creditors holding allowed claims under the plan; the old company and certain subsidiaries are to be wound down and dissolved by the Joint Administrators. New debt includes an $85 million first lien term loan maturing July 18, 2022 (LIBOR plus 6.00%, or base rate plus 5.00%) and a letter of credit agreement covering existing letters of credit with a face amount of $46,664,090.13, also maturing July 18, 2022. A litigation trust run by Drivetrain, LLC received the claims against Noble relating to the spin-off, backed by an interest-free loan of up to $10 million from Paragon International Finance Company. This completes the plan confirmed June 7, 2017; the filing text shown does not give new shares to old shareholders.

asset acquisition disposition

On June 7, 2017 the Delaware bankruptcy court confirmed the Fifth Joint Chapter 11 Plan, overruling all objections including those from an unofficial equity holders' committee. Existing shareholders get no recovery. Secured lenders get $410 million cash, $85 million of new first lien debt, and shares and litigation trust interests; noteholders get $105 million cash plus shares and trust interests; other unsecured creditors get the lesser of 30% or a share of $5 million. Around $2.4 billion of debt is eliminated, and the company and certain subsidiaries are to be wound down and dissolved by the administrators after the effective date.

bankruptcy or receivership

On May 23, 2017 the English court appointed Neville Kahn and David Soden of Deloitte as joint administrators of Paragon Offshore plc, completing the step applied for on May 17. They now manage the company's affairs, while the board advises and executives keep running operations; the aim is to implement the chapter 11 plan, which treats existing equity as worthless. The Delaware confirmation hearing is still set for June 7, with emergence targeted for early July.

bankruptcy or receivership

On May 17, 2017 Paragon's board applied to an English court to appoint two Deloitte partners as joint administrators, a step the company calls a necessary part of its chapter 11 'Consensual Plan'. The press release says that plan deems existing equity worthless, with secured creditors and bondholders receiving equity in a new parent. Management and the board stay on in operating and advisory roles, and a Delaware confirmation hearing is set for June 7, 2017, with emergence expected in July.

bankruptcy or receivership

Noble Corporation ended the Noble Settlement Agreement on April 21, 2017, after Paragon filed a Fourth Joint Chapter 11 Plan that does not seek court approval of it. Under that agreement Noble would have provided bonding and covered its own legal entities' Mexican tax liability plus 50% of Paragon's, in exchange for Paragon releasing Noble from spin-off claims; Mexican tax assessments were about $165 million at Dec 31, 2016. The new plan also combines the 6.75% and 7.25% notes into one general unsecured class and provides for winding down dormant subsidiaries after emergence. This ends the Noble settlement thread from 2016.

material agreement termination

The Bankruptcy Court denied confirmation of the Amended Plan on Nov 15, 2016, and on Nov 29 the noteholders and revolver lenders gave notice ending the plan support agreement effective Dec 2, 2016, citing among other things the lapse of the confirmation deadline. This reverses the August deal that creditors had all backed; Paragon is now in talks with noteholders, revolver lenders and term loan lenders on a new or amended plan, so what shareholders will get is unresolved.

material agreement termination

Paragon filed an amended plan on Aug 5, 2016 with revised terms for creditors: noteholder cash at emergence cut from $345m to $285m, noteholders' share of the common shares raised from 35% to 47%, and a new $60m unsecured note due 2021 added. The revolver's minimum liquidity threshold is lowered to $103m and its leverage/coverage covenants are delayed to Q1 2019. A Noble amendment lets Paragon pay what it owes on the Mexican tax matter by a note of up to $5m. Because noteholders' stake rises from 35% to 47%, existing shareholders' stake would shrink from the earlier 65% (inference from the filing's percentages, not stated outright); the filing also says the revolver amendment needs unanimous lender consent.

material agreement

Paragon and Noble signed the definitive settlement agreement on April 29, 2016, following the February term sheet. Noble would provide bonding to contest the Mexican tax assessments (about $200m as of Dec 31, 2015) and bear 50% of the ultimate liability for Paragon's entities, while Paragon releases Noble from spin-off claims. It still needs Bankruptcy Court approval and takes effect only when the plan is consummated.

material agreement

Paragon and its listed subsidiaries filed voluntary chapter 11 petitions in Delaware on Feb 14, 2016, as the Feb 12 plan support agreement contemplated, and will keep operating as debtors in possession. The filing accelerated the term loan, revolver and notes indenture obligations, but enforcement is automatically stayed. A corrected PSA was filed, and revolver lenders backing it rose to about 96%.

bankruptcy or receivership

Paragon signed a plan support agreement with holders of 77% of its 6.75% and 7.25% senior notes and revolver lenders holding 89% of the revolver debt, for a chapter 11 restructuring to be filed by Feb 14, 2016. Noteholders would get $345m cash, 35% of the reorganized shares and possible deferred payments tied to 2016/2017 EBITDA; existing shareholders would keep 65%; the revolver would be extended to 2021 with a $165m upfront payment; the term loan would be reinstated. Separately, a binding term sheet with Noble would have Noble provide bonding for the roughly $200m Mexican tax assessments (2005-2010) and bear 50% of the ultimate liability for Paragon's entities, in exchange for Paragon releasing Noble from spin-off claims. This resolves the open question of the heavy debt burden by moving to a court-supervised deal, but the plan still needs court approval and the Noble definitive agreement.

material agreement

PARAGON OFFSHORE PLC's exchange filed to remove a class of its securities from listing.

listing compliance notice

The NYSE suspended trading in Paragon's shares immediately, judging the price 'abnormally low', so Paragon will not submit the business plan it had planned. The company applied to be quoted on the OTCQX under 'PGNPF' and says it will keep filing SEC reports; this ends the listing warnings that began in August 2015.

listing compliance notice

The NYSE sent a second notice, saying Paragon fell below its minimum thresholds for average market capitalization and stockholders' equity (both $50 million), and the company had 45 days to submit a plan to regain compliance. This adds to the August share-price warning; the company said the notices do not cause a default under its debt agreements.

listing compliance notice

Paragon drew about $332 million under its revolving credit facility, substantially all of the remaining undrawn amount, bringing borrowings to about $697 million plus about $93 million of letters of credit, with cash of about $734 million. The company says it intends the funds to preserve and enhance liquidity and financial flexibility; the facility matures in July 2019.

debt financing

The NYSE told Paragon its shares averaged below the $1.00 minimum price over 30 trading days; trading continues for now and the company has until February 8, 2016 to regain compliance. This is the first listing warning since the July 2014 listing.

listing compliance notice

Paragon's Prospector subsidiaries agreed a $300 million sale-and-leaseback of the jackups Prospector 1 and Prospector 5 with SinoEnergy subsidiaries, expecting about $292 million net proceeds and a five-year lease with a repurchase obligation of up to $88 million per rig at the end. This turns part of the Prospector purchase into lease financing, with about $373 million of rental and repurchase payments over the term, an $11.5 million cash reserve requirement and a cash sweep of excess rig earnings.

debt financing

Paragon bought about 93.5% of Prospector Offshore Drilling (Oslo Axess-listed) at NOK 14.50 per share, roughly US$112.5 million for the first block of 52,749,014 shares, funded with cash and its revolving credit facility. Prospector owns two high-specification jackups contracted to Total in the UK North Sea and has three more under construction; Paragon says it will own over 95% after further purchases and intends a squeeze-out of the rest, plus a mandatory tender offer.

material agreement

In connection with its spin-off from Noble Corporation plc, Paragon sold $500 million of 6.75% senior notes due 2022 and $580 million of 7.25% senior notes due 2024, and its Cayman subsidiary borrowed $650 million under a seven-year secured term loan (JPMorgan Chase as agent). The filing says the proceeds repaid in full the promissory notes issued to Noble for the transfer of its standard specification drilling business, so Paragon starts life as a separate company carrying this new debt, with covenants limiting additional debt, dividends and asset sales.

debt financing

the New York Stock Exchange certified PARAGON OFFSHORE PLC's securities for listing, clearing them to begin trading.

listing compliance notice