Are we seeing a downfall in diamonds - this could get worse for them as they are looking to become bankrupt file for bankruptcy...
According to a filing with the Securities and Exchange Commission, Diamond Offshore Drilling has elected not to make the semiannual interest payment on its 5.7% senior notes due in 2039. While that payment was due Wednesday, it does have a 30-day grace period. If Diamond Offshore doesn't make an interest payment by May 15, then it will be in default.
That would then trigger a cross-default of the company's bank credit facility as well as its other outstanding notes. The company has retained legal and financial advisers, which are evaluating options. Among those they're likely considering is whether to restructure Diamond Offshore's debt in bankruptcy.
Transocean reported somewhat mixed third-quarter results. On a positive note, the offshore driller hauled in $784 million of revenue. While that was 4% below the year-ago tally, it beat analysts' expectations by $10.4 million. The company, however, reported a net loss of $234 million, or $0.38 per share. That was not only worse than the year-ago adjusted loss of $209 million, or $0.34 per share, but also missed the consensus estimate by $0. 01 per share.
After several challenging years, the offshore drilling market has finally started showing signs of life this year. That's becoming increasingly evident in the number of new opportunities that Transocean and its peers have to bid on offshore drilling contracts. This increase in its workload should eventually drive a meaningful improvement in the company's financial results.