Ocean Rig UDW, Inc. Unable to Extend Confidentiality Agreement with Investors, Prompting Disclosure of Information on Restructuring Negotiations

In connection with these discussions, Highland and Ocean Rig met in New York on January 31, 2017, during which meeting Ocean Rig's management disclosed to Highland that the Company is contemplating a drastic restructuring, and management also committed to provide Highland with additional information concerning the proposed restructuring. At management's request, and in order to facilitate the exchange of information, Highland entered into a Confidentiality Agreement with Ocean Rig, dated January 31, 2017 (the "Confidentiality Agreement").  Following the execution of the Confidentiality Agreement, Ocean Rig and Highland (and their respective representatives) also held several teleconferences in connection with restructuring negotiations, including but not limited to a teleconference on February 24, 2017. 

Since the execution of the Confidentiality Agreement and prior to its termination, Ocean Rig provided only minimal information to Highland.  Nevertheless, as expressly provided by the terms of the Confidentiality Agreement, Highland hereby discloses the following information:

• during the January 31, 2017 meeting and subsequent teleconferences, Ocean Rig conveyed to Highland that Ocean Rig was considering some form of restructuring proposal, but Ocean Rig did not provide Highland with any written restructuring proposal, nor did it outline any definitive terms of a potential restructuring proposal;
• no restructuring proposal has yet been agreed to by any member of the capital structure;
• on February 20, 2017, Ocean Rig provided Highland and its representatives with a 7-page draft presentation on Ocean Rig's financial condition and financial projections, a copy of which is annexed to this disclosure;
• on March 9, 2017, Highland's counsel, Jeffery Sabin of Venable LLP, sent Ocean Rig's counsel a letter requesting, among other things, information necessary to commence any restructuring negotiations, and compliance with the removal and replacement of Deutsche Bank as indenture trustee for the 7.25% Senior Notes Due 2019.  A copy of that letter is annexed to this disclosure; and
• on March 15, 2017, the day on which the Confidentiality Agreement was scheduled to terminate, Ocean Rig's counsel responded to Highland's letter of March 9, 2017.  In its letter, Ocean Rig's counsel conditioned the delivery of any further information to Highland on Highland consenting to an undertaking, the exact terms of which were not specified, that would have prevented Highland's managed and advised funds from exercising any rights they may have had during the covered period.  A copy of that letter is also annexed to this disclosure. 

Ultimately, Ocean Rig and Highland were unable to agree on an extension to the Confidentiality Agreement, which is now terminated.  Should Ocean Rig provide Highland with the information necessary to commence meaningful restructuring negotiations under reasonable terms, Highland and its professionals remain willing and able to commence such negotiations. 

CONTACT: Lucy Bannon, 972-419-6272, [email protected]

SOURCE Highland Capital Management