Hornbeck Offshore to File for Prepackaged Bankruptcy
American OSV operator Hornbeck Offshore Services has announced plans to file for Chapter 11 bankruptcy, following the path taken by most of its competitors since the 2015 oil market crash.
In a regulatory filing, Hornbeck said that it expects to file for a prepackaged bankruptcy proceeding in federal court. It has several loans maturing this month, and the COVID-19 crisis and the collapse of the oil market have had a negative effect on its finances, the company said.
Hornbeck said that it has reached an agreement with creditors on a forbearance period until April 20, giving time for an orderly restructuring. For the intervening period, the creditors have agreed that they will temporarily refrain from "exercising certain of their rights and remedies with respect to certain defaults" by Hornbeck.
"We were working on a consensual plan that would have avoided bankruptcy, but COVID-19 and more importantly the OPEC [oil price] war was a game changer," Hornbeck CFO James Harp told The Advocate. "Our creditors have been very supportive and when the market eventually recovers we are a viable essential company in our industry for the long term. All we need is liquidity."
Hornbeck's stock was listed on the NYSE until December, when it was suspended after declining below the exchange's market capitalization requirements. It now trades on the OTC Pink exchange.
Several large offshore operators have filed for bankruptcy in recent years, using the Chapter 11 process to restructure their balance sheets while keeping operations largely intact. American operator Tidewater eliminated $1.6 billion in loans under a prepackaged bankruptcy in 2017, then acquired competitor Gulfmark, which had recently shed about $430 million in debt through its own bankruptcy reorganization. French firm Bourbon Offshore entered bankruptcy late last year in a French commercial court, but the outcome was somewhat different: it was ultimately sold to a group of its creditors.