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Ocean Rig UDW files for bankruptcy protection

By Patrick Fitzgerald From Market Watch

Offshore drilling contractor Ocean Rig UDW Inc. filed for bankruptcy protection in the U.S. to block distressed debt investors from interfering with a debt restructuring that will slash $3.7 billion in debt from its books.

The Cayman Islands holding company filed Monday night for protection under chapter 15, the section of the U.S. code dealing with cross-border insolvencies. Ocean Rig is one of a number of offshore rig owners and operators brought down by the prolonged slump oil and gas prices.

In a filing Monday filing with the U.S. Bankruptcy Court in New York, Antonios Kandylidis, Ocean Rig UDW’s president, said the U.S. filing was necessary to protect the company from “vulture investors” who bought up the company’s debt last year on the cheap, hoping to take advantage of the steep decline in oil prices.

“These were bad bets,” said Mr. Kandylidis, alluding to the traders’ wager that Ocean Rig would pay off its bonds at maturity. Instead, facing an April 3 interest payment of $14.9 million, Ocean Rig filed for bankruptcy to pursue its debt-for-equity swap with lenders.

Judge Martin Glenn of the U.S. Bankruptcy Court in New York Monday granted Ocean Rig a temporary restraining order to block creditors from interfering with its debt restructuring.

AlixPartners’ Eleanor Fisher and Simon Appell have been appointed Ocean Rig UDW’s Cayman liquidators. Evan Hollander of Orrick, Herrington & Sutcliffe is handling the U.S. bankruptcy case. The case number is 17-10736.

Write to Patrick Fitzgerald at [email protected]

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