Houston-headquartered offshore drilling contractor Diamond Offshore Drilling, Inc. (NYSE: DO) reports that it and select subsidiaries have 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.
Diamond Offshore has a total fleet of 15 offshore drilling rigs, consisting of 11 semisubmersibles and four dynamically positioned drillships
The driller says it intends to use the Chapter 11 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.”
The company and its advisors are pursuing negotiations with its key stakeholders regarding a comprehensive restructuring plan to address the capital structure.
Diamond says it has sufficient capital to fund its global operations in the ordinary course and to make continued investments in safety and reliability during the reorganization proceedings and does not require additional postpetition financing at this time.
Marc Edwards, President and Chief Executive Officer, said “After a careful and diligent review of our financial alternatives, the Board of Directors and management, along with our advisors, concluded that the best path forward for Diamond and its stakeholders is to seek chapter 11 protection. 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.”
Court filings and information about the claims process are available HERE
LOEWS TO BOOK “SIGNIFICANT NON-CASH LOSS”
Diamond Offshore is 53% owned by Loews Corporation (NYSE: L), In an SEC filing, Loews said that effective as of the Chapter 11 filing date, it will no longer consolidate Diamond’s results in its financial statements and that “in connection with the deconsolidation, Loews expects to record in the second quarter of 2020 a significant non-cash loss to recognize the difference between the carrying value and estimated fair value of its interest in Diamond as of the filing date.
Loews’s carrying value of Diamond at December 31, 2019 was $1.5 billion.