Kramer Levin Advises Bondholders in $500 million DIP Loan to Valaris plc in Connection with Ch. 11 Filing

On Aug. 18, 2020, Valaris plc (with approximately 67 rigs, one of the largest oil rig owning companies in the world) filed for bankruptcy in the Southern District of Texas with over $7 billion of financial debt, including approximately $6.5 billion in bond debt and a $600 million drawn revolver. Kramer Levin represents a bondholder group with over $3.2 billion of the bond debt in negotiations with Valaris to restructure its balance sheet. 

On Aug. 18, the negotiations culminated with the bondholders providing Valaris a $500 million DIP loan in connection with the bankruptcy filing, entering into a restructuring support agreement with Valaris which provides for the exchange of all its $7 billion of debt for all the equity in the reorganized company, and entering into an agreement to backstop a $500 million rights offering in connection with Valaris’s projected exit from bankruptcy. The representation will remain active and ongoing throughout the Chapter 11 cases. 

Kramer Levin worked hand in hand with Houlihan Lokey, as financial advisor, and Akin Gump LLP, as UK counsel, to advise the bondholder group in connection with the negotiation of the restructuring support agreement and related agreements, and continues to guide the group through the restructuring process.