Diamond Offshore secures exclusivity extension to finalize plan terms

By Sarah Lizee

Olympia, Wash., Feb. 22 – Diamond Offshore Drilling, Inc. obtained a third extension of its exclusive periods to file and solicit votes on a Chapter 11 plan, according to an order filed Monday with the U.S. Bankruptcy Court for the Southern District of Texas.

Specifically, the court extended the plan filing period through April 22 and the solicitation period through June 21.

The company said in its motion that since its second exclusivity extension, it has continued to engage in extensive good-faith negotiations with key stakeholders, including the revolving credit facility agent, a steering group of revolving lenders, and the steering committee of the informal group of senior noteholders on the terms of a Chapter 11 plan.

On Dec. 13, the debtors executed nondisclosure agreements with additional members of the informal group of senior noteholders, which permitted the debtors to discuss and develop the terms of the debtors’ value-maximizing reorganization strategy with holders of a majority of their senior notes.

Diamond Offshore said these negotiations have been successful and the debtors have reached an agreement in principle with the parties.

“The terms of the restructuring are currently being finalized through definitive documentation, including a plan support agreement, a Chapter 11 plan of reorganization, and commitment papers related to the new money financing contemplated by the restructuring,” the company said.

Under the terms of the restructuring, the debtors expect to file a plan with fully committed financing from some of the revolving lenders and members of the informal group of senior noteholders that will fund distributions under the plan and the debtors’ post-emergence business.

The company said it expects that the plan will render general unsecured creditors unimpaired and provide the debtors’ existing shareholders a meaningful distribution in the form of new warrants.

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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