Cobalt International Energy reported today (14 December) it has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas. But the company says it plans to conduct business as usual, with enough cash on hand to fund its operations during the restructuring process.
The company expects the filing to facilitate the restructuring process and the proposed sale of Cobalt’s assets. Cobalt has been engaged in constructive discussions with its first lien noteholders, second lien noteholders, unsecured noteholders and their respective advisors regarding the need for, sponsorship of, and terms of a restructuring and proposed sale of Cobalt’s assets. Cobalt plans to utilize Chapter 11 to continue and complete these discussions with key stakeholders and evaluate other value-maximizing opportunities to facilitate an expedited restructuring that will deliver maximum value to its stakeholders, the company said in a 14 December press statement.
Cobalt has filed a variety of “first-day” motions with the court seeking, among other things, authority to use the cash collateral, maintain its existing cash management system and other customary relief. When granted, such motions will assure Cobalt’s ability to maintain business-as-usual operations throughout the restructuring process.