BY Fraser Tennant
Blaming the impact of an oil price war and coronavirus (COVID-19) pandemic, offshore drilling contractor Diamond Offshore Drilling, Inc., along with 15 of its subsidiaries, has filed for Chapter 11 bankruptcy. The company has debts of more than $2.6bn.
Diamond intends to use the bankruptcy proceedings to restructure and strengthen its balance sheet and achieve a more sustainable debt profile, while continuing to focus on safe, reliable, and efficient contract drilling services for its global clients.
In addition, Diamond and its advisers – Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel, Alvarez & Marsal as restructuring adviser and Lazard Frères & Co. LLC as financial adviser – are pursuing negotiations with its key stakeholders regarding a comprehensive restructuring plan to address the capital structure.
“After a careful and diligent review of our financial alternatives, the board of directors and management, along with our advisers, concluded that the best path forward for Diamond and its stakeholders is to seek Chapter 11 protection,” said Marc Edwards, president and chief executive of Diamond. “Through this process, we intend to restructure our balance sheet to achieve a more sustainable debt level to reposition the business for long-term success.”
Diamond has sufficient capital to fund its global operations in the ordinary course and to make continued investments in safety and reliability during the reorganisation proceedings and does not require additional post-petition financing. “Our clients and vendors should expect business as usual across our organisation as our world class team will stay steadfast on our collective goal of providing superior operations that clients have come to expect from Diamond,” added Mr Edwards.
A leader in offshore drilling, Diamond provides innovation, thought leadership and contract drilling services to the energy industry. With a total fleet of 15 offshore drilling rigs, consisting of 11 semisubmersibles and four dynamically positioned drillships, the company solves complex deepwater challenges around the globe.
Mr Edwards concluded: “Diamond remains focused on maintaining its high standards as it relates to safety and operational excellence during the Chapter 11 process.
News: Diamond Offshore files for bankruptcy, citing 'price war,' coronavirus