Independence Contract Drilling, Inc. Announces Comprehensive Agreement to Deleverage Balance Sheet and Position the Company for Long-Term Success
Independence Contract Drilling (ICDI) has announced a comprehensive restructuring plan unanimously supported by its Senior Secured PIK Toggle Notes holders. The plan includes a pre-packaged Chapter 11 filing to substantially reduce debt and enhance financial flexibility. Key elements include: $32.5 million in DIP financing, $40 million in exit financing, and the conversion of approximately $199.3 million of Noteholder claims into equity. The restructuring will result in the cancellation of existing common stock, while ensuring continued normal business operations, including payments to vendors and employees.
Independence Contract Drilling (ICDI) ha annunciato un piano di ristrutturazione completo sostenuto all'unanimità dai detentori dei suoi Senior Secured PIK Toggle Notes. Il piano prevede un deposito preconfezionato di Chapter 11 per ridurre sostanzialmente il debito e migliorare la flessibilità finanziaria. I punti chiave includono: 32,5 milioni di dollari in finanziamenti DIP, 40 milioni di dollari in finanziamenti per l'uscita e la conversione di circa 199,3 milioni di dollari di reclami dei detentori di note in capitale. La ristrutturazione comporterà l'annullamento delle azioni ordinarie esistenti, garantendo al contempo il normale proseguimento delle operazioni aziendali, inclusi i pagamenti a fornitori e dipendenti.
Independence Contract Drilling (ICDI) ha anunciado un plan de reestructuración integral respaldado unánimemente por los titulares de sus Senior Secured PIK Toggle Notes. El plan incluye un archivo preempaquetado de Chapter 11 para reducir sustancialmente la deuda y mejorar la flexibilidad financiera. Los elementos clave incluyen: 32,5 millones de dólares en financiación DIP, 40 millones de dólares en financiación de salida y la conversión de aproximadamente 199,3 millones de dólares de reclamaciones de los tenedores de notas en capital. La reestructuración resultará en la cancelación de las acciones ordinarias existentes, asegurando al mismo tiempo la continuidad de las operaciones comerciales normales, incluidos los pagos a proveedores y empleados.
Independence Contract Drilling (ICDI)는 Senior Secured PIK Toggle Notes의 보유자들에 의해 만장일치로 지지받는 종합적인 구조조정 계획을 발표했습니다. 이 계획은 채무를 대폭 줄이고 재무 유연성을 높이기 위한 사전 포장된 Chapter 11 신청을 포함합니다. 주요 요소로는 3,250만 달러의 DIP 자금, 4,000만 달러의 종료 자금, 그리고 약 1억 9,930만 달러의 채권자 청구권을 자본으로 전환하는 것이 포함됩니다. 구조조정은 기존 보통주의 취소를 초래하지만 공급업체와 직원에 대한 지급을 포함해 정상적인 사업 운영은 계속 유지됩니다.
Independence Contract Drilling (ICDI) a annoncé un plan de restructuration complet soutenu à l'unanimité par ses détenteurs des Senior Secured PIK Toggle Notes. Le plan inclut un dépôt préconçu de Chapter 11 visant à réduire considérablement la dette et à améliorer la flexibilité financière. Les éléments clés comprennent : 32,5 millions de dollars en financement DIP, 40 millions de dollars en financement de sortie, et la conversion d'environ 199,3 millions de dollars de réclamations des créanciers en capital. La restructuration entraînera l'annulation des actions ordinaires existantes tout en garantissant la continuité des opérations normales de l'entreprise, y compris les paiements aux fournisseurs et aux employés.
Independence Contract Drilling (ICDI) hat einen umfassenden Restrukturierungsplan angekündigt, der einstimmig von seinen Senior Secured PIK Toggle Notes-Inhabern unterstützt wird. Der Plan umfasst ein vorgepacktes Chapter 11-Verfahren, um die Schulden erheblich zu reduzieren und die finanzielle Flexibilität zu erhöhen. Wichtige Elemente sind: 32,5 Millionen Dollar in DIP-Finanzierung, 40 Millionen Dollar in Exit-Finanzierung und die Umwandlung von etwa 199,3 Millionen Dollar der Ansprüche der Gläubiger in Eigenkapital. Die Restrukturierung wird zur Streichung der bestehenden Stammaktien führen und gleichzeitig einen reibungslosen Geschäftsbetrieb, einschließlich Zahlungen an Lieferanten und Mitarbeiter, gewährleisten.
- Secured $32.5 million DIP financing facility to support ongoing operations
- Obtained $40 million exit financing commitment for future operations
- Converting approximately $199.3 million of debt to equity, significantly reducing leverage
- All vendors and employees will continue to be paid in full
- Filing for Chapter 11 bankruptcy protection
- Existing common stock will be cancelled, resulting in complete shareholder value loss
- New equity securities will not be listed for public trading
- Independence Contract Drilling (ICD) to equitize convertible notes and restructure debt, strengthening the balance sheet and position the Company for long-term growth
- Pre-packaged Chapter 11 filing to facilitate deleveraging and capital injection
- Business operations, service to customers, and payment to vendors to proceed as usual
Chief Executive Officer Anthony Gallegos commented, "I am pleased we have reached agreement with the two holders of our Senior Secured Convertible Notes on a restructuring that materially strengthens ICD and de-levers our balance sheet. I am excited that as part of the restructuring the noteholders, who have deep oilfield experience and have been investors in ICD for some time, will provide us with additional capital that will support rig reactivations and continued investments in technology and performance enhancing features for our rig fleet. I believe this new capital supports our overall efforts and vision to deliver contract drilling services exceeding the expectations of our E&P customer base. I am equally pleased that under the terms of the negotiated plan, we will continue to operate our business in the ordinary course, including payment of all vendors and employees."
On December 2, 2024, ICD commenced a prepackaged Chapter 11 process to implement the Plan in
- a debtor-in-possession ("DIP") financing facility provided by the Noteholders consisting of up to
$32.5 million - the Noteholders' commitment to provide exit financing of
$40 million $7.5 million - the exchange of all remaining Noteholder claims (totaling approximately
$199.3 million - the cancellation of the Company's common stock.
In connection with the implementation of the Plan, the Company filed other various "first day" motions with the Court, requesting customary relief that, once approved by the Court, will further facilitate the Company operating its businesses during the streamlined case and facilitate the payment of all vendors and employees in the ordinary course of business, including undisputed claims on both a pre-petition and post-petition basis.
Additional information about the Company's case, including access to Court filings and other documents related to the restructuring process, is available at https://cases.ra.kroll.com/ICD, a website administered by Kroll Restructuring Administration LLC, a third-party bankruptcy claims and noticing agent. The documents and other information on this website shall not be deemed incorporated by reference herein. Additional information is also available at www.icdrilling.com.
Advisors
Sidley Austin LLP is the Company's restructuring counsel, Riveron is the restructuring advisor, and Piper Sandler is the investment banker.
Latham & Watkins LLP is legal counsel for the Noteholders.
About Independence Contract Drilling, Inc.
Independence Contract Drilling provides land-based contract drilling services for oil and natural gas producers in
Forward-Looking Statements
This news release contains various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities and Exchange Act of 1934, as amended (the "Exchange Act") which are subject to the "safe harbor" created by those sections. Forward-looking statements are based on our management's beliefs and assumptions and on information currently available to our management. All statements other than statements of historical facts are "forward-looking statements" for purposes of these provisions. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "project," "predict," "potential," and similar expressions intended to identify forward-looking statements. Forward-looking statements include, without limitation, statements regarding Company's expectations with respect to operating in the normal course, the Chapter 11 process, the DIP and the Company's anticipated results of operations. Forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors include, among others, risks attendant to the bankruptcy process, including the Company's ability to obtain court approval from the Court with respect to motions or other requests made to the Court throughout the course of the Chapter 11 process, including with respect the DIP; the effects of Chapter 11, including increased legal and other professional costs necessary to execute the Company's restructuring process, on the Company's liquidity (including the availability of operating capital during the pendency of Chapter 11 Cases); the effects of Chapter 11 on the interests of various constituents and financial stakeholders; the length of time that the Company will operate under Chapter 11 protection and the continued availability of operating capital during the pendency of the Chapter 11 process; objections to the Company's restructuring process, the DIP, or other pleadings filed that could protract the Chapter 11 Cases; risks associated with third-party motions in Chapter 11; Court rulings in the Chapter 11 and the outcome of the Chapter 11 process in general; the Company's ability to comply with the restrictions imposed by the terms and conditions of the DIP and other financing arrangements; employee attrition and the Company's ability to retain senior management and other key personnel due to the distractions and uncertainties; and other factors as described in the Company's filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as supplemented in the Company's Quarterly Report on Form 10-Q for the fiscal quarters ended March 31, 2024, June 30, 2024 and September 30, 2024. Furthermore, such forward-looking statements speak only as of the date of this release. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. Risks or uncertainties (a) that are not currently known to us, (b) that we currently deem to be immaterial, or (c) that could apply to any company, could also materially adversely affect our business, financial condition, or future results. Additional information concerning certain factors is contained in the Company's Securities and Exchange Commission filings, including but not limited to the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.
INVESTOR CONTACTS:
Independence Contract Drilling, Inc.
E-mail inquiries to: Investor.relations@icdrilling.com
Phone inquiries: (281) 598-1211
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SOURCE Independence Contract Drilling, Inc.
FAQ
What is the total debt being converted to equity in ICDI's restructuring plan?
How much DIP financing is ICDI receiving in its restructuring?
What happens to ICDI's existing common stock under the reorganization plan?
Will ICDI continue normal business operations during restructuring?
