Oro Negro parent Integradora de Servicios Petroleros Oro Negro has been declared in bankruptcy, according to court documents and two sources close to the situation. The concurso, or bankruptcy declaration, followed a request made by the Mexican oil driller in October.
The concurso of the parent has been added to the bankruptcy proceeding of subsidiary Perforadora Oro Negro, which was accepted by the judge on 5 October.
Mexico City’s Second District Court for Civil Matters accepted the retroactive accumulation of Integradora’s concurso to the subsidiary’s proceeding on 20 October, although with a different docket number, the court documents show. However, the concurso wasn’t approved until 31 October, according to a first source close, and declaration was notified to the parties involved on 6 November, the first and second source noted.
At the time of the bankruptcy request for the Mexico-based parent company, Oro Negro also filed a concurso request for Singapore-based bond issuer Oro Negro Drilling Pte and rig owners Oro Negro Primus Pte, Oro Negro Laurus Pte, Oro Negro Fortius Pte, Oro Negro Decus Pte and Oro Negro Impetus Pte, as reported.
The judge, however, hasn’t decided on the request for these six Singapore-based companies yet, the first source close said.
Oro Negro and an ad hoc committee of bondholders have been at odds since the original concurso filing came to light, and both sides have claimed ownership of Oro Negro Drilling Pte and the five drill rig owners. Following the initial bankruptcy request, the bondholders instructed the trustee to declare an event of default and enforce the shares of Oro Negro Drilling Pte and the rig owners.
A representative of the bondholders, as alleged new owners of all the Singapore-based companies, requested the withdrawal of the concurso request for those six entities, according to court documents and the first source. The judge, however, has asked for additional clarification in regards to the withdrawal request.
Oro Negro has challenged the move made by the bondholders, and the decision on whether to accept the bankruptcy request for the Singapore-based companies is pending a resolution on this challenge, the first source said. Oro Negro’s appeal – incidente de ineficacia – has been admitted for review by the judge, according to court documents.
Along with the appeal, Oro Negro is requesting USD 900m from the bondholders for punitive damages and acts contrary to the law, according to the first source.
Oro Negro Drilling Pte is the issuer of USD 963m 7.5% senior secured bonds due 2019, which were the result of a 2016 restructuring. The bonds have the Primus, Laurus, Fortius, Decus and Impetus drilling jack-ups as collateral.
When approving the original insolvency request on 5 October, the court also issued injunctions preventing any asset foreclosure, prohibiting Pemex – Oro Negro’s sole client – from canceling contracts and forcing the government-owned oil producer to continue paying Oro Negro at current day rates, among other matters. The injunctions also prohibited the rig owners to terminate the respective bareboat charter agreements with Perforadora Oro Negro, which is the entity signing the drilling contracts with Pemex.
The injunctions have already been notified to Pemex, which has challenged them, while Nordic Trustee, the bond trustee, hasn’t been officially notified yet, according to the first source. As reported, Oro Negro in the past informed the bankruptcy judge of its inability to notify Nordic Trustee of the existence of the injunctions.
Enrique Estrella, a visitador official tasked with determining whether the Mexican oil driller fulfills the criteria to be declared in concurso, has just started the so-called visita period, according to the first source. The visitador will have 15 calendar days – with a 15-day extension available – to submit a report on the bankruptcy declaration. The visitador also has to decide whether the injunctions should be maintained, expanded or eliminated.
A visitador for parent Integradora’s proceeding hasn’t been appointed yet, but most likely the task will also be assigned to Estrella, the first source said.
Amid the battle between the company and the bondholders, and with Pemex appealing the injunctions, some of the five jack-ups are still operating for the oil producer, while others have halted their activity, according to the first source.
Oro Negro remains open to negotiating a solution with the bondholders, and its preference is for an out-of-court agreement with them, according to the first source.
“At this stage, an [out-of-court] agreed outcome is still possible,” the first source noted.
Trustee undoes bond drawing
Oro Negro missed in October a USD 8.75m interest and principal payment on the 2019 bonds, as reported. As a consequence of the principal non-payment, Nordic trustee drew bonds in the same amount from a securities deposit, and those drawn bonds were changed to a monetary claim on the issuer, according to a trustee release today.
However, the committee has instructed the trustee to reinstate the situation prior to the bond drawing, the document showed. Therefore, the drawn bonds have been redelivered to the holders as ordinary bonds.
“This is done solely in order to avoid uncertainty of the individual bondholders’ holding of bonds, and with the added benefit for the bondholders to regain tradable bonds,” the trustee release reads. “This does not constitute settlement of the [principal] instalment, and does not remedy the payment default.”
by Pablo Dominguez