Diamond Offshore gets court approval of headquarters sale-leaseback

By Sarah Lizee

Olympia, Wash., Nov. 9 – Diamond Offshore Drilling, Inc. received court approval to sell its corporate headquarters in Houston to Fuller Realty Interests, LLC for $7.5 million under a sale-leaseback transaction, according to an order filed Friday with the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, the debtors said they estimate that the sale-leaseback will provide them with $6.4 million in value on a net present value basis over the next 13 years.

“In addition, the sale-leaseback will also allow the debtors to avoid the disruption and costs of having to relocate their headquarters while in Chapter 11,” the motion said.

The debtors said they will lease about 100,000 square feet of their existing office space from the buyer.

Rent will be $2 million per year, with a lease term of three years, terminable at the debtors’ option after two years upon six months’ prior notice.

Fuller Realty required that the debtors obtain bankruptcy court approval by Nov. 9.

Closing of the sale is expected to occur in mid-November.

The offshore oil and gas drilling contractor is based in Houston. The company filed bankruptcy on April 26, 2020 under Chapter 11 case number 20-32307.

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