UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 18, 2019
Vantage Drilling International
(Exact name of registrant as specified in its charter)
Cayman Islands | 333-231736 | 98-1372204 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
c/o Vantage Energy Services, Inc.
777 Post Oak Boulevard, Suite 800
Houston, TX 77056
(Address of principal executive offices) (Zip Code)
(281)404-4700
(Registrant’s telephone number, including area code)
(Not applicable)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule14a-12 under the Exchange Act (17 CFR240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule14d-2(b) under the Exchange Act (17 CFR240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule13e-4(c) under the Exchange Act (17 CFR240.13e-4(c)) |
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
N/A | N/A | N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 8.01. Other Events.
Brazil Improbity Action
As previously disclosed by Vantage Drilling International (the “Company”) in its filings with the Securities and Exchange Commission, on April 27, 2018, the Company was added as an additional defendant in a legal proceeding initiated by the Brazilian federal public prosecutor’s office in the State of Parana, Brazil (the “Brazilian Federal Prosecutor”) against certain individuals in connection with the contracting of the Titanium Explorer drillship to Petroleo Brasileiro S.A. (“Petrobras”) under a 2009 drilling contract, with the Brazilian Government and Petrobras as plaintiffs. The proceeding is taking place at the 11th Federal Court of the Judicial Branch of Curitiba, State of Parana, Brazil (the “Brazilian Federal Court”).
The damages claimed in the proceeding are in the amount of BRL 102.8 million (approximately $31.0 million), together with a civil fine equal to three times that amount. The Company understands that the Brazilian Federal Court issued an order authorizing the seizure and freezing of the assets of the Company and the other three defendants in the legal proceeding, as a precautionary measure, in the amount of approximately $124 million. The Company and the other three defendants are jointly and severally liable for this amount. The seizure order has not had an effect on the Company’s assets or operations, as the Company does not own any assets in Brazil, and does not currently intend to relocate any assets to Brazil. On February 13, 2019, the Company learned that the Brazilian Federal Prosecutor has requested mutual legal assistance from the U.S. Department of Justice (“DOJ”) pursuant to the United Nations Convention against Corruption of 2003 to obtain a freezing order against the Company’s U.S. assets in the amount of $124.0 million.
On April 12, 2019, the Company filed an interlocutory appeal with the 4th Circuit of the Federal Court of Appeals in Porto Alegre, State of Rio Grande do Sul, Brazil (the “Brazilian Appellate Court”), the appellate court hearing appeals in the “Car Wash” cases, to stay the seizure and freezing order of the Brazilian Federal Court.
On May 20, 2019, the Company announced that the Brazilian Appellate Court ruled in favor of the Company’s appeal to stay the seizure and freezing order of the Brazilian Federal Court. The foregoing ruling is still subject to confirmation by a three-judge panel, and is subject to appeal, and the Company can offer no assurances that the stay will be confirmed or as to the outcome of any appeal thereof. The Company has communicated said ruling to the DOJ, and has asked the Brazilian Federal Court to do the same.
On June 26, 2019, the Company learned that the Brazilian Government made a filing with the Brazilian Federal Court reporting that the DOJ has advised the Brazilian Ministry of Justice that it would not be possible for the DOJ to comply with the mutual assistance request in respect of the asset freeze order. On July 5, 2019, the Company further learned from the Brazilian Ministry of Justice that the DOJ’s response to the request for mutual assistance stated that no legal grounds existed for the implementing the requested asset freeze, and that the DOJ was returning the request without taking action and considers the matter concluded.
The Company intends to continue to vigorously defend against the allegations made in the underlying improbity action. However, the Company can neither predict the ultimate outcome of this matter nor that there will not be further developments in the “Car Wash” investigation or in any other ongoing investigation or related proceeding that could adversely affect it.
Third Lien Notes
The Company previously announced in its Current Report on Form8-K filed on June 7, 2019, that the board of directors of the Company had approved the conversion of all of the Company’s currently outstanding 1%/12%Step-Up Senior Secured Third Lien Convertible Notes (the “Third Lien Notes”) into ordinary shares of the Company (the “Conversion”) to take effect on or as promptly as practicable after July 1, 2019, that the Conversion would be further subject to the satisfaction of certain conditions required by the indenture governing the Third Lien Notes, and that the Company at the time expected to satisfy such conditions on or after July 1, 2019.
In light of the recently announced agreement with, and payment by, Petrobras and certain of its subsidiaries, which was reported by the Company in its Current Report on Form8-K filed on June 24, 2019, the board of directors of the Company has decided to reevaluate whether it is in the best interests of the Company and its shareholders to proceed with the conversion of the Third Lien Notes into ordinary shares at this point in time. Accordingly, no action is being undertaken by the Company at the current time to proceed with the Conversion.
***
This foregoing is provided for informational purposes only and does not constitute an offer to sell, a solicitation of an offer to purchase, or an offer to purchase with respect to, any securities.
The information above includes forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. These forward-looking statements are subject to certain risks, uncertainties and assumptions identified above or as disclosed from time to time in the Company’s filings with the Securities and Exchange Commission. As a result of these factors, actual results and outcomes may differ materially from those indicated or implied by such forward-looking statements. The Company disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: July 18, 2019
VANTAGE DRILLING INTERNATIONAL |
/s/ Douglas E. Stewart |
Douglas E. Stewart |
Vice President, General Counsel and Corporate Secretary |