UPDATE 1-Paragon Offshore to file for pre-packaged bankruptcy

Fri Feb 12, 2016 9:48am EST
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Feb 12 (Reuters) - Paragon Offshore Plc said it will file for a pre-negotiated Chapter 11 bankruptcy on or before Feb. 14, becoming the first U.S. energy-related company to seek court protection from creditors this year amid a plunge in oil prices.

The Houston-based driller, which has rigs around the world, has been struggling with a heavy debt load.

Paragon decided not to make a $15.4 million bond interest payment due Jan. 15, triggering a 30-day grace period before default.

Paragon Offshore, spun off from Noble Corp Plc in 2014, said on Friday it has reached a restructuring agreement with its debtholders to reduce debt by more than $1.1 billion.

The company had long-term debt of about $2.57 billion and $732 million in cash at Sept. 30, according to public filings.

The company had hired Lazard Ltd and Weil, Gotshal & Manges LLP to explore strategic alternatives related to its capital structure.

Paragon also said it reached an agreement with Noble, releasing the former parent from any claims related to the spinoff. (Reporting by Amrutha Gayathri in Bengaluru and Jessica DiNapoli in New York; Editing by Don Sebastian)