A bankruptcy court judge has approved Hornbeck Offshore Services Inc.’s reorganization plan, clearing the way for the Covington-based service vessel company to emerge from Chapter 11 protection in a few months.
Judge David R. Jones of the Southern District of Texas approved the plan, which has the overwhelming support of businesses with claims against Hornbeck.
"The court's approval of our plan of reorganization is another significant milestone in our restructuring process and we appreciate the overwhelming show of support from our lenders and noteholders," said Todd M. Hornbeck, CEO of Hornbeck offshore. "We are on-track to quickly complete our restructuring and emerge with a strengthened financial foundation and well positioned for long-term success."
Hornbeck filed for bankruptcy in May. It had more than $1.2 billion in debt on its books that it wanted to restructure.
Company executives had been negotiating with lenders for months trying to restructure debt without bankruptcy, but the bottom fell out after the coronavirus swept across the world and the price of crude oil dropped to $20 per barrel as demand dwindled.
The company now has access to a $75 million debtor-in-possession loan provided by existing creditors. Hornbeck plans to issue $100 million in new equity.