PSV Hermitage Offshore Services Ltd

By Peg Brickley 

Hermitage Offshore Services Ltd. filed for bankruptcy protection, its business of providing support for oil-drilling operations battered by the coronavirus pandemic.

The Tuesday filing in a U.S. Bankruptcy Court in New York automatically staved off creditors of Hermitage, which operates mostly in the North Sea and off the West Coast of Africa

Bankruptcy followed forbearance agreements that bought Hermitage time with lenders DNB Bank ASA of Norway and Skandinaviska Enskilda Banken AB of Sweden, which are owed nearly $133 million. Hermitage pledged 10 platform supply vessels and 11 crew boats to the banks in January as security to refinance the loans.

Offshore drillers have been especially hard hit by Covid-19, with a number of companies filing for bankruptcy or warning that they would do so since the start of the pandemic.

Pacific Drilling SA, an offshore oil and gas drilling contractor, said last week that it might file for bankruptcy and it has started talks with a group of creditors about a restructuring. Fieldwood Energy LLC, which operates in the Gulf of Mexico, recently filed for chapter 11 protection and Noble Corp. filed for bankruptcy in July. Diamond Offshore Drilling Inc. filed for bankruptcy in April while Valaris PLC, which carries some $7 billion in debt, recently warned that it might soon file for bankruptcy.

Hermitage has been issuing public warnings about its financial troubles and losses for months.

The Bermuda-based company last month reported "a significant and abrupt deterioration in the financial condition," raising substantial doubt that it could stay in business. Behind the distress was the one-two punch of pandemic distress and diving crude oil prices that have felled dozens of other energy companies.

Earlier, Hermitage warned investors that major oil producers have cut back significantly, meaning lower rates for its vessels, contract cancellations and renegotiations.

Hermitage filed for bankruptcy protection under case number 20-11850, with Perella Weinberg Partners and Snapdragon Advisory AB as financial advisers and Proskauer Rose LLP as legal counsel.

Write to Peg Brickley at peg.brickley@wsj.com

(END) Dow Jones Newswires

August 12, 2020 13:43 ET (17:43 GMT)

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