Regarding our filing of a petition for the commencement of corporate reorganization proceedings
We appreciate your continued support and guidance to our business.
This notice is to inform you that our company, Japan Drilling Co., Ltd., has filed a petition with the Tokyo District Court today for the commencement of corporate reorganization proceedings under the Corporate Reorganization Act of Japan. Accordingly, the Court has issued a temporary restraining order to prohibit repayments as well as a supervision/prohibition order and a comprehensive prohibition order.
1. Background to the Filing of the Petition for Corporate Reorganization
In the midst of the long stagnate offshore drilling market, our company has continued to improve our business through independent efforts such as cost reduction and receiving orders for new drilling projects. However, our company became insolvent after recording operating losses for 3 consecutive terms as of the term ending in March 2018 as well as recognizing the impairment losses concerning the offshore drilling rig, "HAKURYU-14", transferring the loss provision for the "HAKURYU-15" construction project and so forth during the term ending in March 2018. This made the business environment surrounding our company even more severe, leading to our decision this time to file a petition for legal proceedings to reconstruct the business of our company.
Our company intends to continue the offshore drilling business in the future and make our best effort to offer our clients service in the same manner as we have done so far. Your understanding is highly appreciated.
2. Regarding Corporate Reorganization Proceedings
A corporate reorganization proceeding is a proceeding to maintain and rehabilitate the business of a company experiencing difficulties at the same time as coordinating the interests among the creditors, shareholders and other interested parties, by way of establishing and performing a reorganization plan under the supervision of a court. Therefore, a corporate reorganization proceeding is a process to reconstruct the business of a company. Our company is continuing its business just as we did before filing the petition, in cooperation with our subsidiaries and affiliates in and outside Japan.
In the upcoming corporate reorganization proceedings for our company, payment of debts to the business partners who are necessary for the continued operation of the offshore drilling rig is permitted even after the filing of the petition for the commencement of reorganization proceedings, subject to the condition that performance of business transactions will be continued under the terms and conditions similar to those before the petition. Our company intends to make every possible effort to continue the rig operation in the future as we have done so far.
For any questions regarding this matter, please contact the person inside our company who has been the contact point with your company.
President and Representative Director
Japan Drilling Co., Ltd.