Ocean RIG Files for Bankruptcy Protection in US

Rig contractor Ocean RIG UDW Inc filed for Chapter 15 bankruptcy protection in a U.S. court amid a deep and prolonged downturn in the industry.

Shares of the company plunged 36.4 percent to 46 cents in early trading on Tuesday.

The Cyprus-based company, which had $3.25 billion in debt as of Dec. 31, filed for bankruptcy in the United States Bankruptcy Court for Southern District of New York on Monday.

Under U.S. bankruptcy laws, Chapter 15 grants a foreign company protection from creditors looking to seize its assets in the country. The company said on Tuesday it entered into an agreement with creditors representing over 72 percent of Ocean RIG's outstanding consolidated indebtedness for a financial restructuring.

Ocean Rig's chief executive, George Economou, said last year that the company would consider alternatives, including a possible reorganization under US bankruptcy laws. Last year, Hercules Offshore Inc filed for bankruptcy protection, just six months after emerging from its first bankruptcy.

 

(Reporting by John Benny in Bengaluru)