History
Diamond Offshore funded its rig fleet with bonds and bank loans, went through Chapter 11 in 2020-21, then was bought by Noble in September 2024.
2013-2019: Building a new rig and borrowing to fund it
The record opens in May 2013, when Diamond Offshore agreed with Hyundai Heavy Industries to build a new harsh-environment semisubmersible rig (a floating drilling platform built for rough seas). It was expected after November 2015 at a projected cost of about $755 million. A three-year contract with a BP subsidiary for work off South Australia was signed for it, starting at $585,000 per day.
The company paid its way mostly with debt. In November 2013 it sold $1.0 billion of notes: $250 million at 3.45% due 2023 and $750 million at 4.875% due 2043. This raised about $988.1 million net, and it said it might use the money to retire older notes due in 2014 and 2015. In October 2014 it enlarged its revolving credit facility (a bank line it can draw on as needed) from $1.0 billion to $1.5 billion, with maturity extended to October 2019. Nothing was borrowed at that point.
The record then goes quiet until August 2017, when it agreed to sell $500 million of 7.875% notes due 2025. It planned to use the money, plus cash, to redeem $500.0 million of 5.875% notes due 2019. In October 2018 it signed a new $950 million five-year revolver and cut the older one to $325 million. Neither was drawn. Share numbers barely moved over these years, at about 139 million, and the beats explain no change.
2020-2021: Chapter 11
On March 17, 2020, citing uncertainty from COVID-19, Diamond drew $400 million on its $950 million revolver as a precaution to build up cash. Six weeks later, on April 26, 2020, it and certain subsidiaries filed for Chapter 11 bankruptcy in Houston, with about $435 million of unencumbered cash to fund operations. The filing put its notes and the revolver (then $442 million outstanding) into default, though collection was paused by the bankruptcy.
The stock's listing did not survive the filing. NYSE Regulation began proceedings to delist it, which Diamond did not plan to appeal, and it expected quotation on OTC Pink instead. The exchange filed to remove the securities from listing in May 2020.
In January 2021 Diamond signed a Plan Support Agreement with some noteholders and lenders. Senior noteholders would receive 70% of the new equity, with a further 30% going to those funding new exit notes. The revolver would be refinanced, and unsecured creditors would be paid in full or left unimpaired. Existing shareholders would get only warrants for 7% of the new equity. The court confirmed the plan on April 8, 2021, and the old shares, 138,054,311 as of February 4, 2021, were cancelled. Diamond emerged in April 2021. The year-end count fell to about 100 million, consistent with the old equity being replaced.
2021-2023: A new start and a refinancing
In August 2021 the board formed an independent committee to explore strategic alternatives, which could mean staying standalone, buying assets or a business combination. It hired Goldman Sachs and Milbank as advisers. No decision was announced. In March 2022 the exchange certified the company's securities for listing, clearing them to trade.
The next move was a refinancing. On September 12, 2023, subsidiaries launched a $500 million offering of second-lien notes (debt that ranks behind the revolver in claims on assets). It priced the next day, upsized to $550 million at 8.500%, due October 1, 2030. The revolver commitments were cut from $400 million to $300 million. The notes closed on September 21, 2023, raising about $540 million net. The money repaid and ended the term loan, redeemed the 2027 PIK toggle notes in full and repaid revolver borrowings. In its marketing, the company said debt had fallen from $2 billion at emergence to about $500 million, with a contract backlog of about $1.6 billion.
2024: Sale to Noble
In February 2024 Diamond announced a two-year extension for the Ocean BlackLion with a bp subsidiary in the U.S. Gulf of Mexico, from September 2024, adding about $350 million of backlog. It also signed Serica Energy (UK) to use the Ocean Patriot on two plug-and-abandonment wells (sealing old wells) in the U.K. North Sea.
On June 9, 2024, Diamond agreed to be acquired by Noble Corporation plc. Each share would convert into $5.65 in cash plus 0.2316 Noble shares. The proxy statement, filed July 25, put the implied value at $15.52 per share on June 7 and $16.70 on July 17, and said former holders would own about 15% of Noble on a fully diluted basis. A special meeting was set for August 27.
The merger closed on September 4, 2024. The stock was delisted, the revolver was paid in full and its liens released, and Noble Offshore Drilling took over the 8.500% notes. Warrants stayed exercisable for the merger consideration for 90 days. On September 16, 2024, the company deregistered its securities, ending its obligation to file reports with the SEC. As of that date Diamond Offshore existed only as a wholly owned subsidiary of Noble. Shareholder suits over merger disclosures and appraisal demands were open, with no outcome seen.
Written from the 23 story beats below (2013 to 16 Sept 2024), which come from the company's own announcements and filings.