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A copy of the Plan is included as Exhibit 99.1 hereto and is incorporated herein by reference. The above description of the Plan is qualified in its entirety by the full text of the Plan.

DIP Credit Agreement

In connection with the filing of the Plan, on May 22, 2020, the Debtors entered 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”), 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, to which, the DIP Lenders agreed 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, and to finance the ongoing general corporate needs of the Debtors during the course of the Chapter 11 Cases.

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 contains customary events of default, including events related to the Chapter 11 Cases, 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 are 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 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.

A copy of the DIP Credit Agreement is filed as Exhibit 10.1 hereto and is incorporated herein by reference. The above description of the DIP Credit Agreement is qualified in its entirety by the full text of such exhibit.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.03 of this Current Report on Form 8-K regarding the DIP Credit Agreement is incorporated by reference into this Item 2.03.

Item 2.04. Triggering Events that Accelerate or Increase a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement.

As described in Item 1.03 above, the May 19, 2020 filing of the Plan with the Bankruptcy Court constitutes an event of default that accelerated the Company’s obligations under the following debt instruments, each as amended, supplemented modified or restated (the “Debt Instruments”):

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As of May 19, 2020, the Company had approximately (i) $224 million in outstanding principal under the 2020 Indenture, (ii) $450 million in outstanding principal under the 2021 Indenture, (iii) $350 million in outstanding principal under the First Lien Term Loan Agreement, (iv) $121 million in outstanding principal under the Second Lien Term Loan Agreement and (v) $50 million in outstanding principal under the Senior Credit Agreement. The Debt Instruments provide that as a result of the filing of the Chapter 11 Cases, the principal and accrued interest due thereunder shall be immediately due and payable; however, any efforts to enforce such payment obligations under the Debt Instruments are automatically stayed as a result of the filing of the Plan, and the holders’ rights of enforcement in respect of the Debt Instruments are subject to the applicable provisions of the Bankruptcy Code.

Item 7.01. Regulation FD Disclosure.

The Disclosure Statement (as defined in the Plan) 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/. 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 to and in accordance with the Disclosure Statement.

The information in this Item 7.01 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.

Additional Information on the Chapter 11 Cases

Court filings and information about the Chapter 11 Cases can be found at a website maintained by the Company’s claim agent, Stretto, at https://cases.stretto.com/hornbeck.

Item 8.01. Other Events.

The Company cautions that trading in Hornbeck’s securities during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks. Trading prices for Hornbeck’s securities may bear little or no relationship to the actual recovery, if any, by holders of Hornbeck’s securities in the Chapter 11 Cases. Based on the currently contemplated Plan, the Company expects that stockholders will receive no recovery at the end of the Chapter 11 Cases, consistent with legal priorities.

On May 19, 2020, the OTCQB U.S. Market (the “OTCQB”) was notified that Hornbeck had filed the Plan and commenced the Chapter 11 Cases. As an issuer may not be listed on the OTCQB if it is subject to bankruptcy or reorganization proceedings, the OTCQB removed Hornbeck from listing on the OTCQB and Hornbeck moved to and will continue trading on the OTC Pink Open Market (the “OTC Pink”). The Company’s common stock began trading on the OTC Pink on May 20, 2020 under the Symbol “HOSSQ.”

On May 20, 2020, the Bankruptcy Court entered the Order (A) Approving Notification and Hearing Procedures for Certain Transfers of Common Stock and (B) Granting Related Relief Docket No. 84 (the “NOL Order”). The NOL Order establishes certain notification and hearing procedures (the “Procedures”) related to certain purchases, sales, and other transfers of the Debtors’ existing common stock in order to preserve and protect the potential value of the Debtors’ existing and future net operating losses and certain other of the Debtors’ tax attributes. The Procedures, among other things, restrict certain transactions involving, and require notices of the holdings of and proposed transactions by, any person or entity that is or, as a result of such a transaction, would become a Substantial Shareholder (as defined below) of common stock. For purposes of the Procedures, a “Substantial Shareholder” is any entity or individual person that has beneficial ownership (as determined in accordance with applicable rules under the Internal Revenue Code of 1986, as amended) of, after taking into account certain options or other similar rights to acquire beneficial ownership of common stock, at least 1,782,072 shares of common stock (representing approximately 4.5% of all issued and outstanding shares of common stock as of the Petition Date). Any prohibited transfer of stock would be null and void ab initio and will result in remedial actions and such other (or additional) measures as the Bankruptcy Court may deem appropriate.

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The foregoing description of the NOL Order is qualified in its entirety by reference to the NOL Order and the Procedures, filed as Exhibit 99.2 hereto and incorporated herein by reference.

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 Cases and the DIP Credit 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 obtain approval by the Bankruptcy Court of the Plan or any other plan of reorganization, including the treatment of the claims of the Company’s lenders and trade creditors, among others; (ii) the Company’s ability to obtain approval with respect to motions in the Chapter 11 Cases and the Bankruptcy Court’s rulings in the Chapter 11 Cases and the outcome of the Chapter 11 Cases in general; (iii) the length of time the debtors will operate under the Chapter 11 Cases; (iv) risks associated with third-party motions in the Chapter 11 Cases, which may interfere with the debtors’ ability to develop and consummate the Plan or other plan of reorganization; (v) the potential adverse effects of the Chapter 11 Cases on the debtors’ liquidity, results of operations or business prospects; (vi) the ability to execute the Company’s business and restructuring plan; (vii) increased legal and advisor costs related to the Chapter 11 Cases and other litigation and the inherent risks involved in a bankruptcy process; and (viii) 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.

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HORNBECK OFFSHORE SERVICES INC /LA Exhibit
EX-10.1 2 d909640dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 EXECUTION VERSION       SUPERPRIORITY DEBTOR-IN-POSSESSION TERM LOAN AGREEMENT DATED AS OF May 22,…
To view the full exhibit click here

About Hornbeck Offshore Services, Inc. (NYSE:HOS)

Hornbeck Offshore Services Inc. provides marine transportation, subsea installation and accommodation support services to exploration and production, oilfield service, offshore construction and the United States military customers. The Company focuses on providing marine solutions for the deepwater and ultradeepwater energy industry in domestic and select foreign locations. The Company, through its subsidiaries, operates offshore supply vessels (OSVs), multi-purpose support vessels (MPSVs), and a shore-base facility to provide logistics support and specialty services to the offshore oil and gas exploration and production industry, primarily in the United States, Gulf of Mexico, Latin America and selected international markets. Its OSVs and MPSVs support the deep-well, deepwater and ultra-deepwater activities of the offshore oil and gas industry. It provides vessel management services for other vessel owners, such as crewing, daily operational management and maintenance activities.