Item 1.01. Entry into a Material Definitive Agreement.
Backstop Commitment Agreement
On May 13, 2020, Hornbeck Offshore Services, Inc. ("Hornbeck" or the "Company"),
on behalf of itself and certain of its subsidiaries (together with Hornbeck,
collectively, the "Debtors") entered into a backstop commitment agreement (the
"Backstop Commitment Agreement") with certain of the Consenting Unsecured
Noteholders, the Consenting First Lien Lenders and the Consenting Second Lien
Lenders (collectively, the "Backstop Commitment Parties"), whereby each Backstop
Commitment Party agreed to backstop the Rights Offering (as defined below) of
$100 million of the common stock of the Reorganized Company, par value $0.00001
per share (the "New Equity") (or Jones Act Warrants issued in lieu thereof) in
an amount specified therein (collectively, the "Backstop Commitments"). Pursuant
to the Backstop Commitment Agreement, each of the Backstop Commitment Parties
agreed to purchase any shares of New Equity (or Jones Act Warrants issued in
lieu thereof) offered but not purchased in the rights offering (the "Rights
Offering"), pursuant to which the Company will offer and sell shares of New
Equity (or Jones Act Warrants issued in lieu thereof) to certain Eligible
Holders of Allowed Claims. In exchange for providing the Backstop Commitments,
Hornbeck has agreed to pay the Backstop Commitment Parties, subject to approval
by the U.S. Bankruptcy Court for the Southern District of Texas, Houston
Division (the "Bankruptcy Court"), a Backstop Commitment Premium in an aggregate
amount equal to five percent of the Rights Offering Amount payable in shares of
New Equity (or Jones Act Warrants in lieu thereof) on the Effective Date.
The Backstop Commitment Agreement will be terminable by Hornbeck and/or the
Required Commitment Parties upon certain customary events specified therein,
including, among others, i) the termination of the RSA, ii) the mutual written
consent of Hornbeck and the Required Commitment Parties by written notice to the
other such Party(ies) or iii) either Hornbeck or the Required Commitment Parties
if the Plan Effective Date has not occurred on or prior to the date that is 75
days after the Petition Date.
The foregoing description of the proposed Backstop Commitment Agreement is only
a summary and the Backstop Commitment Agreement is subject in all respects to
Bankruptcy Court approval in a form satisfactory to the Backstop Commitment
Parties. Capitalized terms used but not otherwise defined herein shall have the
meaning given to such terms in the Backstop Commitment Agreement.
A copy of the Backstop Commitment Agreement is filed as Exhibit 10.1 hereto and
is incorporated herein by reference. The above description of the Backstop
Commitment Agreement is qualified in its entirety by the full text of such
exhibit.
DIP Credit Agreement Commitment Letter
On May 13, 2020, the Debtors entered into a commitment letter that contemplates
entering into a debtor-in-possession credit agreement on the terms set forth in
a Superpriority Debtor-in-Possession Term Loan Agreement (the "DIP Credit
Agreement"), to be entered into by and among Hornbeck, as Parent Borrower,
Hornbeck Offshore Services, LLC, as Co-Borrower, the lenders party thereto (the
"DIP Lenders"), and Wilmington Trust National Association, as Administrative
Agent and Collateral Agent, pursuant to which, subject to Bankruptcy Court
approval, the DIP Lenders will agree to provide the Company with loans in an
aggregate principal amount not to exceed $75 million that, among other things,
will be used to repay in full $50 million in loans outstanding under that
certain Senior Credit Agreement dated as of June 28, 2019 by and among the
Company, as Borrower, the obligors signatory thereto, Wilmington Trust, National
Association, as Collateral Agent and Administrative Agent, and the lenders party
thereto, as amended, and to finance the ongoing general corporate needs of the
Debtors during the course of the chapter 11 proceedings.
Subject to Bankruptcy Court approval, the maturity date of the DIP Credit
Agreement will be six months following the effective date of the DIP Credit
Agreement. The DIP Credit Agreement will contain customary events of default,
including events related to the chapter 11 proceedings, the occurrence of which
could result in the acceleration of the Company's obligation to repay the
outstanding indebtedness under the DIP Credit Agreement. The Company's
obligations under the DIP Credit Agreement will be secured by a security
interest in, and lien on, substantially all present and after acquired property
(whether tangible, intangible, real, personal or mixed) of the Debtors and will
be guaranteed by all of the Company's material subsidiaries.
The foregoing description of the proposed DIP Credit Agreement is only a summary
and the DIP Credit Agreement is subject in all respects to Bankruptcy Court
approval in a form satisfactory to the DIP Lenders.
2
--------------------------------------------------------------------------------
A copy of the DIP Credit Agreement Commitment Letter is filed as Exhibit 10.2
hereto and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
Press Release and Disclosure Statement
The Disclosure Statement (as defined in the Backstop Commitment Agreement) was
distributed to certain creditors of the Company commencing on May 13, 2020. A
copy of the Disclosure Statement, which is subject to Bankruptcy Court approval,
is being furnished free of charge at
https://cases.stretto.com/hornbeck/court-docket/plan-solicitation/. On May 13,
2020, the Company issued a press release announcing the solicitation of votes
relating to the Company's proposed joint prepackaged plan of reorganization (the
"Plan"). A copy of the press release is being furnished as Exhibit 99.1 and is
incorporated into this Item 7.01 by reference. This Current Report on Form 8-K
is not a solicitation of votes to accept or reject the Plan or an offer to sell
securities of the Company. Any solicitation of votes or offer to sell or
solicitation of an offer to buy any securities of the Company will be made only
pursuant to and in accordance with the Disclosure Statement.
The information in this Item 7.01 and Exhibit 99.1 attached hereto shall not be
deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or otherwise subject to the
liabilities of that section, and is not incorporated by reference into any
filing under the Securities Act of 1933, as amended, or the Exchange Act.
Forward-Looking Statements
This communication contains forward-looking statements, including, in
particular, statements about the term and the provisions of the Plan and the
chapter 11 proceedings, the DIP Credit Agreement Commitment Letter, the Rights
Offering and the Backstop Commitment Agreement. These statements are based on
the Company's current assumptions, expectations and projections about future
events. Although the Company believes that the expectations reflected in these
forward-looking statements are reasonable, the Company can give no assurance
that the expectations will prove to be correct.
These forward-looking statements relate, in part, to (i) the Company's ability
to consummate the Rights Offering, (ii) the Company's ability to obtain approval
by the Bankruptcy Court of the DIP Credit Agreement; and (iii) other factors
disclosed by the Company from time to time in its filings with the SEC,
including those described under the caption "Risk Factors" in the Company's most
recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We do not
intend to publicly update or revise any forward-looking statements as a result
of new information, future events or otherwise, except as required by law.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 Backstop Commitment Agreement dated as of May 13, 2020 by
and among the Company and the commitment parties named therein.
10.2 Commitment Letter to enter into Superpriority
Debtor-in-Possession Term Loan Agreement dated as of May 13,
2020 by and among Hornbeck, as Parent Borrower, Hornbeck
Offshore Services, LLC, as Co-Borrower, and the lenders party
thereto.
99.1 Press Release dated May 13, 2020.
3
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses