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Diamond Offshore Announces Comprehensive Restructuring Plan

Source: www.gulfoilandgas.com 1/25/2021, Location: North America

Diamond Offshore Drilling, Inc. has entered into a plan support agreement with holders of over 70% of each of its senior unsecured notes and revolving credit facility loans regarding a financial restructuring transaction that will significantly deleverage the Company's balance sheet and position the Company for future growth.

As previously disclosed in the Company's press release dated April 27, 2020, Diamond 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 "Chapter 11 Cases").

The plan support 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. In addition, 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) a $300 million to $400 million first lien, first out revolving credit facility and (b) 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 to operate successfully post-emergence. To that end, the Company is seeking to emerge from the Chapter 11 Cases as quickly as the Court's schedule and the requisite notice periods will permit. For additional information, please refer to the Company's Current Report on Form 8-K filed along with this announcement.

The agreed plan was developed over the course of several months of detailed discussions with the Company's key stakeholders, and the plan is designed to ensure that Diamond can continue to operate its differentiated fleet of offshore drilling rigs in a safe, reliable, and efficient manner in what continues to be a challenged market. After the restructuring, Diamond will have a strong cash position with sufficient liquidity to benefit from an eventual market recovery.

Marc Edwards, Chairman, President and Chief Executive Officer, said "The comprehensive plan support agreement we signed today raises new capital and is overwhelmingly supported by our banks and our bondholders. 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. With our improved capital structure, we will be in a strong position to capitalize on market opportunities as they emerge."

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