EMAS Chiyoda Subsea Chapter 11 plan confirmed; effective date June 29

By Caroline Salls

Pittsburgh, June 29 – EMAS Chiyoda Subsea Ltd.’s modified third amended plan of reorganization was confirmed and took effect on Thursday, according to an order and notice filed Thursday with the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, the plan provides for the restructuring of emerging and liquidating debtors.

The emerging debtors consist of EMAS-AMC Pte. Ltd., EMAS Saudi Arabia Ltd., EMAS Chiyoda Subsea Services Pte Ltd., EMAS Chiyoda Subsea Inc. and EMAS-AMC (Thailand) Co. Ltd. The liquidating debtors consist of Lewek Constellation Pte. Ltd., EMAS Chiyoda Subsea Marine Base LLC and Lewek Falcon Shipping Pte. Ltd.

Under the plan, Chiyoda Corp. and Subsea 7 Finance (UK) plc will serve as plan sponsors, although the company said its restructuring support agreement allows for the ongoing review of potential alternative investors who may provide a superior exit path.

In addition, the plan calls for the acquisition of the equity in the emerging debtors and some assets of other debtors by a newly formed entity to be owned by a member of the Subsea 7 Group and designated by Subsea 7.

EMAS said the new company will acquire the U.S. debtor’s assets and employees rather than the new equity interests in U.S. debtor, unless the new company or the plan sponsors elect to receive the equity interests instead.

Proceeds from the acquisition will be used to fund the plan, including the payment of administrative, priority and unsecured claims.

Creditor treatment

Administrative claims, DIP loan claims, priority tax claims, other priority claims and Helix secured claims will be paid in cash.

Other secured claims and Falcon lender secured claims will be reinstated or holders will receive the collateral securing the claim.

If the Constellation lenders accept a qualifying offer, the Constellation vessel will be sold, and the lenders will receive the net proceeds. If the offer is not accepted, the vessel will be transferred to a special purpose vehicle, and all interests in the Constellation debtor will be reissued or transferred to the lenders.

Bank guaranty claims will be reinstated.

Holders of general unsecured claims against non-Thailand debtor emerging debtors will receive a share of additional cash.

Holders of general unsecured claims against the Thailand debtor, the Constellation debtor and the Falcon debtor will receive a share of any distributable value from the relevant debtor’s estate after payment of all senior claims.

Holders of general unsecured claims against the Marine Base Opco debtor will receive a share of net sale proceeds.

Holders of interests in all debtors and subordinated claims will receive no distribution.

EMAS, a Houston-based global offshore marine company, filed bankruptcy on Feb. 27. The Chapter 11 case number is 17-31146.

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