DIAMOND OFFSHORE DRILLING, INC. Item 1.01. Entry into a Material Definitive Agreement
As previously disclosed, on
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The Plan Support Agreement requires the Consenting Stakeholders to support the proposed financial restructuring (the "Restructuring") of the Debtors consistent with the terms and conditions set forth in the chapter 11 plan of reorganization (the "Plan") attached as an exhibit to the Plan Support Agreement, the Backstop Agreement attached as an exhibit to the Plan Support Agreement, and the commitment letter for the Exit Revolving Credit Facility (as defined below) (the "Commitment Letter") attached as an exhibit to the Plan Support Agreement, in each case, subject to and on the terms and conditions set forth in the Plan Support Agreement and the exhibits attached thereto. The Debtors have agreed to seek approval of the Plan and complete their restructuring efforts subject to the terms, conditions, and milestones contained in the Plan Support Agreement and otherwise comply with the terms and requirements set forth in the Plan Support Agreement. The Plan Support Agreement also provides for termination by the parties upon the occurrence of certain events.
The Plan Support Agreement and the Plan contemplate a comprehensive deleveraging and restructuring of the Company's balance sheet. Specifically, material terms of the Restructuring embodied by the Plan and the Plan Support Agreement include, among other things:
• Upon the Debtors' emergence from the Chapter 11 Cases, the reorganized
Company will enter into new exit financing facilities consisting of (a) a
$300 million to $400 million aggregate principal amount first lien, first
out exit revolving credit facility (the "Exit Revolving Credit
Facility"), (b) a $100 million to $200 million aggregate principal amount
first lien, last out exit term loan facility (the "Exit Term Loan
Facility"), and (c) $110 million aggregate principal amount in first
lien, last out exit notes (the "Exit Notes") plus any Exit Notes issued
on account of the Commitment Premium (as defined in the Backstop
Agreement). The Exit Revolving Credit Facility will be fully committed,
with up to $100 million drawn as of the Effective Date (as defined in the
Plan). $75 million of the Exit Notes will be issued and outstanding as of
the Effective Date, excluding any Exit Notes issued on account of the
Commitment Premium (as defined in the Backstop Agreement), while $35
million of the Exit Notes will remain fully committed but undrawn as of
the Effective Date and will be available through a delayed draw mechanic
pursuant to the terms of the Exit Notes (the "Delayed Draw Exit Notes").
The reorganized Company will pay a ticking fee of 3% per annum on the
aggregate principal amount of any undrawn Delayed Draw Exit Notes, which
shall be payable in cash semi-annually in arrears commencing on the date
that is six months from the Debtors' emergence from the Chapter 11 Cases
until the earlier of (i) the date of the issuance of the Delayed Draw
Exit Notes, (ii) the date that is 24 months prior to the scheduled
maturity of the Exit Notes, and (iii) the date that the Delayed Draw
Subscription Agreement (as defined in the Backstop Agreement) is
terminated in accordance with its terms.
• The Exit Revolving Credit Facility will mature in 2026. Interest on the
Revolving Credit Facility will accrue at LIBOR + 425 bps and is payable
in cash.
• The Exit Term Loan Facility will mature in 2027. At the reorganized
Company's option, interest on the Exit Term Loan Facility will accrue at
a cash pay rate of LIBOR + 600 bps, a payment in kind ("PIK") rate of
LIBOR + 1000 bps, or a 50/50 combined cash and PIK rate of LIBOR + 800
bps. The Exit Term Loan Facility will rank pari passu with the Exit
Notes.
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• The Exit Notes will mature in 2027. At the reorganized Company's option,
interest on the Exit Notes will accrue at a cash pay rate of 9.0%, a PIK
rate of 13.0%, or a 50/50 combined cash and PIK rate of 11.0%. The
Company may redeem the Exit Notes, in whole or in part, at its option at
any time on at least 15 days but not more than 60 days prior written
notice at the applicable redemption prices set forth in the relevant
indenture, subject to the limitations on the Company's ability to
exercise such redemption contained in the Exit Revolving Credit Facility
and Exit Term Loan Facility.
• In connection with the Exit Revolving Credit Facility, the Debtors have
secured commitments from certain holders of RCF Claims pursuant to the
Commitment Letter that ensures at least $300 million in aggregate
principal amount of the Exit Revolving Credit Facility is fully committed
to upon the Debtors' emergence from the Chapter 11 Cases. As
consideration for entering into the Commitment Letter and providing the
Commitments (as defined therein), the Debtors will pay to the Commitment
Parties (as defined in the Commitment Letter) a commitment fee of
approximately $3.5 million payable in kind in the form of additional
drawn commitments under the Exit Revolving Credit Facility, which shall
increase both the amount of drawn and total commitments thereunder, in
exchange for providing such new money commitments.
• In connection with the Exit Notes, the Debtors have secured commitments
from certain holders of the Senior Notes pursuant to the Backstop
Agreement that ensures the Exit Notes are fully funded or committed to,
as applicable, upon the Debtors' emergence from the Chapter 11 Cases
pursuant to (a) certain private placements (the "Private Placements") set
forth in the Backstop Agreement and (b) two fully backstopped rights
offerings (the "Rights Offerings") pursuant to which eligible holders of
Senior Notes will receive subscription rights to purchase or commit to
purchase, as applicable, the Exit Notes not sold or committed to pursuant
to the Private Placements. As consideration for entering into the
Backstop Agreement and providing the commitments set forth therein, the
Debtors will pay to the Financing Parties (as defined in the Backstop
Agreement) a commitment premium equal to 9.0% of the aggregate amount of
commitments provided by the respective Backstop Parties (as defined in
the Backstop Agreement) under the Backstop Agreement, payable in kind in
the form of additional Exit Notes.
• As a component of the Restructuring, the Company will conduct the Rights
Offerings, whereby eligible holders of Senior Notes will receive the
opportunity to subscribe for their pro rata share of up to $68,750,000 of
the Exit Notes in accordance with and pursuant to the Plan, subject to
the terms and conditions of the Rights Offering Procedures (as defined in
the Plan Support Agreement). Upon the Debtors' emergence from the Chapter
11 Cases, each eligible holder of such subscription rights that
participates in the Rights Offerings with respect to the Exit Notes will
also receive, in consideration for its participation in the Rights
Offerings, its pro rata share of 18.75% of the reorganized Company's
newly issued common equity, subject to dilution by the New Warrants and
the MIP Equity Shares (each as defined in the Plan).
• Upon the Debtors' emergence from the Chapter 11 Cases, the Company's
existing revolving credit facility will be refinanced by the Exit
Revolving Credit Facility and the Exit Term Loan Facility, and holders of
RCF Claims will receive either (a) if such holder elects to participate
in the Exit Revolving Credit Facility, a combination of its pro rata
. . .
Item 7.01. Regulation FD Disclosure.
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The Cleansing Materials are based solely on information available to the Company as of the date of the Cleansing Materials and were not prepared with a view toward public disclosure. The Cleansing Materials should not be relied on by any party for any reason.
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A copy of such press release is filed as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.
The information included in this Item 7.01 and Exhibits 99.1 and 99.2 to this Current Report on Form 8-K shall not be deemed "filed" for the purposes of or otherwise subject to the liabilities under Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Unless expressly incorporated into a filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act made after the date hereof, the information contained in this Item 7.01 and Exhibits 99.1 and 99.2 hereto shall not be incorporated by reference into any of our filings, whether made before or after the date hereof, regardless of any general incorporation language in any such filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits. Exhibit number Description 10.1* Plan Support Agreement, dated as ofJanuary 22, 2021 , by and among the Debtors and the Consenting Stakeholders 99.1 Updated Business Plan of the Company 99.2 Press Release dated as ofJanuary 25, 2021 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Certain schedules and similar attachments have been omitted. The Company
agrees to furnish a supplemental copy of any omitted schedule or attachment to
the
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