With just weeks until it runs out of cash, Hornbeck Offshore has hatched a plan to keep the company alive.
The over-the-counter-traded, Louisiana offshore player said Friday that it is looking to fold the $224.3m in debt due this year and the $450m next year into new bonds due in 2023 and 2025.
Holders of each year's notes are eligible for $556.12 in the 2023 bonds and $443.88 for each $1,000 in debt held if tendered by 28 February. Those amounts drop to $528.32 and $421.68 after that date.
The offer, which expires on 23 March, requires 99% of bondholders and 66.6% of shareholders to approve the plan. The company said 52% of shareholders have already committed to voting for approval.
As part of the deal, it will send certain vessels and related assets to “unrestricted subsidiaries”. The subsidiaries are not subject to most of the restrictions under the new notes' indentures or existing credit facilities.
Hornbeck's liquidity issues stretch back to last summer, when it disclosed it had enough money to cover its 2019 debt, but if it did not come up with a solution to its 2020 and 2021 debt, the company would run out of money by the end of March.
It spent most of 2019 either extinguishing or pushing back existing debt and chief executive Todd Hornbeck said in October negotiations with bondholders were ongoing.
In December, the company was delisted from the New York Stock Exchange for failing to keep an average market capitalization of at least $15m for the previous 30 days.
Since then, Hornbeck Offshore shares have traded on the OTC Pink marketplace, commonly known as the "pink sheets", under the symbol HOSS.
Shares for the company, which vowed to appeal the move, were up 75% to $0.34 Friday.
