Diamond Offshore Announces Restructuring Plan
Diamond Offshore Drilling, Inc. announced Monday that it has entered into a plan support agreement with holders of over 70 percent of each of its senior unsecured notes and revolving credit facility loans regarding a financial restructuring transaction.
The deal will significantly deleverage the company’s balance sheet and position the business for future growth, according to Diamond Offshore, which disclosed back in April 2020 that it and certain of its subsidiaries filed voluntary petitions for reorganization under chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas.
The agreement outlines a comprehensive plan for deleveraging the company’s balance sheet through the equitization of its senior unsecured notes, resulting in a reduction of over $2.1 billion of funded indebtedness, Diamond Offshore noted. The company also revealed that certain holders of senior unsecured notes have agreed to invest up to $110 million of new capital in the form of first lien, last out exit notes, while certain holders of revolving credit facility loans have agreed to provide exit financing facilities in the form of a $300 million to $400 million first lien, first out revolving credit facility and a $100 million to $200 million first lien, last out term loan facility.
Proceeds of the new exit financing facilities will fund plan distributions and provide sufficient liquidity for Diamond Offshore to operate successfully post-emergence, the company said, adding that it is seeking to emerge from the Chapter 11 cases as quickly as the court’s schedule and the requisite notice periods will permit.
“The comprehensive plan support agreement we signed today raises new capital and is overwhelmingly supported by our banks and our bondholders,” Marc Edwards, the chairman, president and chief executive officer, of Diamond Offshore said in a company statement.
“We look forward to emerging with a stronger balance sheet, significantly less debt, and increased financial flexibility. This agreement is a testament to the market’s belief in Diamond and our world class team,” he added.
“With our improved capital structure, we will be in a strong position to capitalize on market opportunities as they emerge,” Edwards continued.
On April 27 last year, Diamond Offshore revealed that it had received notification from NYSE Regulation, Inc. that it had determined to commence proceedings to delist the company’s shares of common stock. NYSE Regulation determined that the company was no longer suitable for listing pursuant to Listed Company Manual Section 802.01D after the company’s disclosure that it and select subsidiaries had filed voluntary petitions for reorganization under chapter 11 of the U.S. Bankruptcy Code. On April 28, the company’s common stock began trading on the OTC Pink markets under the symbol DOFSQ.
Diamond Offshore is a leader in offshore drilling, according to its website, which notes that the company provides contract drilling services to the energy industry around the globe with a total fleet of 15 offshore drilling rigs.
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