UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 
FORM 8-K

 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
Date of report (Date of earliest event reported): May 17, 2017

 
Paragon Offshore plc
(Exact name of registrant as specified in its charter)

 

England and Wales	 	001-36465	 	98-1146017	
(State or Other Jurisdiction
of Incorporation)	 	(Commission
File Number)	 	(IRS Employer
Identification No.)	
 
3151 Briarpark Drive, Suite 700
Houston, Texas 77042 
 (Address of principal executive offices) (Zip Code)
 
+44 20 330 2300
(Registrant’s telephone number, including area code)
 
(Not applicable)
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
 
o       Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o       Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o       Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o       Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company o
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

 
Item 1.03 Bankruptcy or Receivership
 
On May 17, 2017, the board of directors of Paragon Offshore plc (the “ Company ”) filed an administration application with the High Court of Justice, Chancery Division, Companies Court of England and Wales (the “ English Court ”) seeking the appointment (the “ Proposed Appointment ”) by order of the English Court of Neville Barry Kahn (insolvency practitioner number 8690) and David Philip Soden (insolvency practitioner number 15790), each of Deloitte LLP, Athene Place, 66 Shoe Lane, London, EC4A 3BQ, as proposed joint administrators of the Company (the “ Proposed Administrators ”). The hearing to consider the Proposed Appointment will take place on May 23, 2017 at the Companies Court, The Rolls Building, 7 Rolls Building, Fetter Lane, London, EC4A 1NL (the “ Administration Hearing ”). The Administration Hearing may be adjourned or continued from time to time by the English Court. For details of the timing of the Administration Hearing, including any adjournments or other changes, please visit the English Court’s website at http://www.justice.gov.uk/courts/court-lists/list-cause-rolls. Upon appointment by the English Court, the Proposed Administrators will assume all powers to manage the business and affairs of the Company; however, the Company’s existing board of directors has agreed to remain involved in an advisory capacity to the Proposed Administrators until the Company emerges from its insolvency proceedings under chapter 11 of the United States Bankruptcy Code , and the existing executive management team will remain responsible for the operational management of the Company and its subsidiaries. The purpose of the Proposed Appointment is to, among other things, implement the Company’s chapter 11 plan of reorganization (the “ Consensual Plan ”), subject to confirmation by the United States Bankruptcy Court for the District of Delaware (the “ Bankruptcy Court ”).
 
Item 5.01 Changes in Control of Registrant
 
The disclosure under Item 1.03 herein is incorporated by reference in its entirety.
 
Item 8.01 Other Events
 
Attached as Exhibit 99.1 to this Current Report on Form 8-K is a copy of the Company’s press release, dated May 17, 2017, announcing the filing of the administration application.
 
In accordance with General Instruction B.2 of Form 8-K, Exhibit 99.1 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “ Exchange Act ”) or otherwise subject to the liabilities of that section, nor shall Exhibit 99.1 be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
 
Cautionary Note Regarding Forward-Looking Statements
 
This release contains forward-looking statements that involve certain risks, uncertainties and assumptions. These include but are not limited to risks associated with the Company’s reorganization, the Proposed Appointment of the Proposed Administrators, the ability of the Company to implement the transactions contemplated by the Consensual Plan in the Bankruptcy Court, the general nature of the oil and gas industry, actions by regulatory authorities, customers and other third parties, and other factors detailed in the “Risk Factors” section of the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2016, and in its other filings with the Securities and Exchange Commission (the “ SEC ”), which are available free of charge on the SEC’s website at www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated.

Item 9.01 Financial Statements and Exhibits.
 
(d) Exhibits
 
99.1        Press Release dated May 17, 2017
 
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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 	Paragon Offshore plc	
 	 	
May 17, 2017	By:	/s/ Lee M. Ahlstrom	
 	Name:	Lee M. Ahlstrom	
 	Title:	SVP & CFO	

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Exhibit Index

Exhibit No.	 	Description	
99.1	 	Press Release dated May 17, 2017	
 
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Exhibit 99.1

Paragon Offshore plc
 3151 Briarpark Drive
Suite 700
Houston, Texas 77042		

PRESS RELEASE
 
PARAGON OFFSHORE FILES APPLICATION FOR ADMINISTRATION IN UNITED KINGDOM TO ADVANCE ITS CHAPTER 11 PLAN
 
·                   Administration process in UK is a necessary part of previously announced restructuring plan
 
·                   Paragon will continue to operate in normal course during administration
 
·                   Paragon remains on track to emerge from chapter 11 in July
 
HOUSTON, May 17, 2017 —Paragon Offshore plc (“ Paragon ” or the “ company ”) (OTC: PGNPQ) announced today that the company’s board of directors filed an application with the High Court of Justice, Chancery Division, Companies Court of England and Wales (the “ English Court ”) for the appointment of two partners of Deloitte LLP to serve as joint administrators of the company (the “ Proposed Administrators ” and, upon their appointment by the English Court, the “ Administrators ”) in the United Kingdom under paragraph 12(1)(b) of Schedule B1 to the Insolvency Act 1986 (the “ Application ”).  A hearing on the Application is expected to be scheduled shortly in London at the English Court.
 
Paragon’s decision to apply for the appointment of the Proposed Administrators is a necessary component of the consensual plan of reorganization (the “Consensual Plan” ) under chapter 11 of the United States Bankruptcy Code that the company announced on May 2, 2017.  Under the Consensual Plan, Paragon’s existing equity will be deemed worthless and the company’s secured creditors and unsecured bondholders will receive equity in a new reorganized parent company.
 
“We believe that the appointment of administrators is an important positive step forward in Paragon’s restructuring process,” said Dean E. Taylor, Paragon’s President and Chief Executive Officer.  “In connection with their support of the Consensual Plan, which contemplates the appointment of the Proposed Administrators, the ad hoc committee of term lenders, the steering committee of revolving lenders, and our unsecured creditors’ committee each also support the Application. Our Consensual Plan will eliminate more than $2.4 billion of existing debt and allow us to emerge from chapter 11 as a stronger, better positioned

 
company capable of managing the challenges of this difficult environment.  If the Application is approved by the English Court, the next milestone will be our confirmation hearing, scheduled to commence June 7, 2017 in Delaware, following which, if confirmed, we expect to emerge from chapter 11 in July.”
 
Under administration, Paragon will continue to conduct business in its normal course.  Drilling contracts will continue and vendors and employees will continue to be paid.  The Administrators will assume all powers to manage the affairs of the company; however, Paragon’s existing board has agreed to remain involved in an advisory capacity to the Administrators until the company emerges from chapter 11, and the existing executive management team will remain responsible for the operational management of the Paragon group.
 
Additional Information
 
Details of the Consensual Plan can be found in the Current Report on Form 8-K filed by the company with the U.S. Securities and Exchange Commission (the “ SEC ”) on May 3, 2017.  Additional information will be available on Paragon’s website at www.paragonoffshore.com or by calling Paragon’s Restructuring Hotline at 1-888-369-8935.
 
The Application is scheduled to be heard by the English Court on May 23, 2017 at the Companies Court, The Rolls Building, 7 Rolls Building, Fetter Lane, London, EC4A 1NL. The hearing of the Application may be adjourned or continued from time to time by the English Court. Further details of the Application (including details of the time set for the hearing of the Application in the English Court, and copies of certain documents filed with the English Court) will be available on the U.K. Administration tab of the company’s chapter 11 website hosted by KCC at www.kccllc.net/paragon .
 
Weil, Gotshal & Manges LLP is serving as legal counsel to Paragon and Lazard is serving as financial advisor.  Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal counsel to the Creditors’ Committee and Ducera Partners LCC is serving as financial advisor.  Simpson Thacher & Bartlett LLP is serving as legal counsel to the Revolver Agent and PJT Partners is serving as financial advisor.  Freshfields Bruckhaus Deringer LLP is serving as legal counsel to the Term Loan Agent and FTI Consulting, Inc. is serving as financial advisor.
 
Forward-Looking Disclosure Statement
 
This document contains forward-looking statements. Statements regarding the Consensual Plan, Paragon’s ability to obtain approval of the Consensual Plan, its ability to implement the proposed transaction set forth under the Consensual Plan, contract commitments, approval of
 
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the Application, Paragon’s operations under administration, Paragon’s capital structure and competitive position following emergence from bankruptcy, the bankruptcy process including timing and steps, and implications for shareholders, as well as any other statements that are not historical facts in this release, are forward-looking statements that involve certain risks, uncertainties and assumptions. These include but are not limited to risks associated with the general nature of the oil and gas industry, risks associated with the company’s restructuring, actions by regulatory authorities, customers and other third parties, and other factors detailed in the “Risk Factors” section of Paragon’s annual report on Form 10-K for the fiscal year ended December 31, 2016, Paragon’s most recently filed report on Form 10-Q, and in Paragon’s other filings with the SEC, which are available free of charge on the SEC’s website at www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated.
 
About Paragon Offshore
 
Paragon is a leading provider of standard specification offshore drilling services.  Paragon’s operated fleet includes 32 jackups, including two high specification heavy duty/harsh environment jackups, four drillships, and one semisubmersible.  Paragon’s primary business is contracting its rigs, related equipment and work crews to conduct oil and gas drilling and workover operations for its exploration and production customers on a dayrate basis around the world. Paragon’s principal executive offices are located in Houston, Texas. Paragon is a public limited company registered in England and Wales with company number 08814042 and registered office at 20-22 Bedford Row, London, WC1R 4JS, England. Additional information is available at www.paragonoffshore.com.
 
For additional information, contact:

For Investors	Lee M. Ahlstrom	
 	 	
& Media:	Senior Vice President & Interim Chief Financial Officer	
 	 	
 	+1.832.783.4040	
 
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