Akin Gump advises ad hoc group of noteholders on Valaris plc financial restructuring

Akin Gump has acted as English, Hong Kong, German and UAE counsel, and international antitrust counsel, to the ad hoc group of noteholders in relation to the financial restructuring of UK offshore drilling contractor Valaris plc and its outstanding debt liabilities of approximately USD7.1 billion. Valaris is the world’s largest offshore drilling company by fleet size.

In August 2020, Valaris announced that it had filed a voluntary petition to commence a chapter 11 process in the U.S. Bankruptcy Court, following entry into a restructuring support agreement and backstop commitment agreement with certain of its noteholders to reorganize its financial structure and substantially reduce its debt load.

The restructuring involved an equitisation of the outstanding debt liabilities, the provision of a debtor-in-possession facility by the ad hoc group of noteholders and the issuance of new secured notes. The restructuring was implemented via chapter 11 and an English pre-pack administration sale. Throughout the process, Valaris continued to operate in the ordinary course of business.

Judge Marvin Isgur of the U.S. Bankruptcy Court noted in his confirmation remarks that the chapter 11 plan involved a “full deleveraging” of the group and the confirmation of the plan in eight months was a “remarkable achievement.”

Akin Gump worked alongside Kramer Levin Naftalis & Frankel LLP in New York which acted as lead and U.S. counsel to the ad hoc group of priority guaranteed noteholders in connection with the restructuring.

The Akin Gump team was led by London financial restructuring partner James Terry with counsel Jakeob Brown. The team also included Hong Kong financial restructuring partner Naomi Moore, counsel Jeremy Haywood and associate Janice Wong, Frankfurt restructuring counsel Markus Käppler and London financial restructuring associate Diana Dai; competition partner Davina Garrod, counsel Victoria Yuan and associate Sebastian Casselbrant-Multala; finance partner Stephen Peppiatt and associate Blake Sherry; financial regulatory partner Ezra Zahabi and associate Suley Siddiqui; tax partners Stuart Sinclair and Sophie Donnithorne-Tait and counsel Serena Lee; international trade partners Chiara Klaui and Christian C. Davis; corporate partner Vance Chapman, counsel Jasdeep Rai and associate Kelvin Mahal, and UAE corporate partner Rizwan Kanji and corporate counsel Hamed Afzal.