HOUSTON, July 20, 2017 (GLOBE NEWSWIRE) -- Paragon Offshore Limited commented today on new voluntary proceedings commenced by Paragon Offshore plc (in administration) and certain of Old Paragon’s subsidiaries under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court in the District of Delaware. The subsidiaries of Old Paragon included in the proceedings are Prospector Offshore Drilling S.à r.l, Prospector Rig 1 Contracting Company S.à r.l and Prospector Rig 5 Contracting Company S.à r.l.
The Prospector Group has an interest in two high specification jackup rigs (the “Rigs”) pursuant to two sale-leaseback agreements executed with subsidiaries of SinoEnergy Capital Management Ltd. (the “Lessors”). In connection with the Leases, Old Paragon’s shares in Prospector Offshore Drilling S.à r.l. (the “Prospector Shares”) are pledged in favor of the Lessors. In order to transfer the Prospector Group to New Paragon, New Paragon must obtain a consent to the transfer from the Lessors. The Debtors have been in negotiations with the Lessors since May 2017 with respect to the transfer, but have been unable to reach a mutually agreeable solution.
On July 18, 2017 (the “Effective Date”), New Paragon announced that it had successfully completed its corporate and financial reorganization and emerged from bankruptcy. The Prospector Group was not transferred to New Paragon at the Effective Date and its members remain direct and indirect subsidiaries of Old Paragon. On the Effective Date, New Paragon, Old Paragon, and Neville Kahn and David Soden as joint administrators of Old Paragon (the “Joint Administrators”) entered into a management agreement (the “Management Agreement”), pursuant to which New Paragon has the economic benefit of and operational control over the Prospector Group subject to certain restrictions in the Lessors’ share pledges. In addition, New Paragon agreed to continue to procure the provision of management services to the Prospector Group while the Prospector Group remains held by Old Paragon. Further, pursuant to the Management Agreement, Old Paragon undertook to transfer the Prospector Group to New Paragon at such time as New Paragon obtains the consent of the Lessors to such transfer or such consent is no longer required.
The Prospector Group is an important component of New Paragon’s future business plan and in order to preserve the value of the Prospector Group for New Paragon and its new equity holders, the respective boards of directors of the Prospector Group companies and the Joint Administrators of Old Paragon elected to commence the voluntary chapter 11 proceedings of the Prospector Group and Old Paragon, respectively.
During these proceedings, the Rigs will continue to be operated by New Paragon under the Management Agreement. The company does not expect any impact to customers, suppliers, or employees.
“We sincerely hope that the commercial issues in dispute can be resolved through continued good faith negotiation between the parties,” said Mr. Dean E. Taylor, Interim President and Chief Executive Officer of New Paragon. “Nevertheless, we appreciate the actions taken by Old Paragon and the Prospector Group companies are out of an abundance of caution to preserve the value of these assets which are an important part of New Paragon’s future.”
Additional Information about Old Paragon
Neville Barry Kahn and David Philip Soden were appointed Joint Administrators of Old Paragon on May 23, 2017. The affairs, business and property of Old Paragon are managed by the Joint Administrators. The Joint Administrators act as agents of Old Paragon and contract without personal liability. In performing their work in relation to this appointment, the Joint Administrators are bound by the U.K. Insolvency Code of Ethics, a link to which has been provided on the website set up for this case at www.deloitte.com/uk/paragonoffshoreplc.
Court filings as well as other information related to restructuring by Old Paragon and the Prospector Group are available through Old Paragon’s claims agent, Kurtzman Carson Consultants, at http://www.kccllc.net/prospector.
About New Paragon
New Paragon is a leading provider of standard specification offshore drilling services. New Paragon’s current fleet includes 32 jackups, including two high specification heavy duty/harsh environment jackups, four drillships, and one semisubmersible. New Paragon’s primary business is contracting its rigs, related equipment and work crews to conduct oil and gas drilling and workover operations for its exploration and production customers on a dayrate basis around the world. New Paragon’s principal executive offices are located in Houston, Texas. New Paragon is a company incorporated in the Cayman Islands with registered number MC-323580, and registered office at c/o Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. Additional information is available at www.paragonoffshore.com.