Slaughter and May is advising Valaris plc (“Valaris”) on its restructuring to be implemented through prearranged chapter 11 cases and one or more parallel English processes.
Valaris is an industry leading offshore drilling service provider and operates one of the largest global fleets in the sector.
On 18 August 2020, Valaris entered into a restructuring support agreement (“RSA”) and backstop commitment agreement (“BCA”) with around 50 per cent. of its unsecured noteholders in order to implement a comprehensive financial restructuring and substantially reduce its debt profile. The agreed plan – which was developed over several months of discussions – will help to ensure that Valaris is able to support continued operations during the current lower demand environment and provide a robust financial platform to take advantage of market recovery over the long term.
The RSA and BCA contemplate, among other things, the full equitisation of over $6.5 billion of debt under Valaris’ unsecured revolving credit facility and unsecured notes, a fully backstopped rights offering to unsecured noteholders for $500 million of new secured notes and the effective cancellation of existing equity interests in Valaris in exchange for warrants for post-emergence equity in certain circumstances. To implement the RSA, on 19 August 2020, Valaris filed prearranged chapter 11 cases in the Southern District of Texas together with the agreed restructuring plan.
Slaughter and May, as corporate and UK restructuring counsel, is working as part of an integrated team with the Valaris in-house legal team and Kirkland & Ellis LLP. Lazard is acting as financial advisor to Valaris in connection with the restructuring and Alvarez & Marsal is acting as restructuring advisor. Ashurst LLP is acting as independent counsel to the Board of Valaris.