Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement.
Notice of Default
On September 2, 2020, funds managed by, or affiliated with, Pacific Investment
Management Company LLC ("PIMCO") and Whitebox, who together hold 25.1% in
aggregate principal amount of Existing 2027 Guaranteed Notes, delivered a notice
of default and conditional declaration of acceleration (the "Notice") to
Transocean Inc. alleging a breach of the indenture (the "2027 Notes Indenture")
governing Transocean Inc.'s 8.00% Senior Notes due 2027 ("Existing 2027
Guaranteed Notes"). The Notice alleges a default occurred following Transocean's
previously announced internal reorganization, which included the formation of
Transocean Mid Holdings 1 Limited ("Mid Holdings 1"), Transocean Mid Holdings 2
Limited ("Mid Holdings 2") and Transocean Mid Holdings 3 Limited ("Mid Holdings
3", and collectively with Mid Holdings 1 and Mid Holdings 2, the "Structurally
Senior Guarantors"). PIMCO and Whitebox allege that the Structurally Senior
Guarantors should have, but did not, guarantee the Existing 2027 Guaranteed
Notes. In addition, counsel to PIMCO and Whitebox indicated that a similar
notice, based on the same alleged default, may be delivered with respect to
Transocean Inc.'s 7.50% Senior Notes due 2025 (the "Existing 2025 Guaranteed
Notes"). Transocean has not received any such notice with respect to the
Existing 2025 Guaranteed Notes as of the time of the filing of this Current
Report on Form 8-K.
Transocean strongly disagrees with the assertion made by PIMCO and Whitebox in
the Notice and, on September 7, 2020, Transocean delivered a response to PIMCO
and Whitebox demanding a withdrawal of the Notice. Transocean maintains that the
internal reorganization and Exchange Offers comply with the terms of its
existing indentures (including the 2027 Notes Indenture) and that the
Structurally Senior Guarantors are not required to, and will not, guarantee any
of Transocean's existing notes (including the Existing 2027 Guaranteed Notes).
Transocean believes the allegation is meritless and will continue to defend
itself vigorously against such claim and any related future claims to ensure
that any such wrongful notices do not result in an improper event of default or
acceleration.
As of June 30, 2020, $750 million aggregate principal amount of Existing 2025
Guaranteed Notes and $750 million aggregate principal amount of Existing 2027
Guaranteed Notes were outstanding. As of 11:59 p.m., New York City time, on
September 4, 2020, approximately $210 million or 28% of the Existing 2025
Guaranteed Notes and approximately $149 million or 20% of the Existing 2027
Guaranteed Notes had been tendered in the Exchange Offers, which would no longer
be outstanding if purchased in the Exchange Offers.
If it is ultimately determined that a default exists under the 2027 Notes
Indenture and that the Notice was properly provided by such holders, following a
90-day grace period, upon a valid declaration of acceleration by at least 25% of
the then outstanding aggregate principal amount of the 2027 Notes, all unpaid
principal,
interest and other obligations under the 2027 Notes Indenture would be due and
payable unless holders waived such acceleration or the underlying default had
been cured. An acceleration of Transocean's obligations under the 2027 Notes
Indenture would result in an event of default under its $1.3 billion revolving
credit facility, which, upon the direction of, and if not waived by, the lenders
holding at least 50% of the principal amount of commitments under the revolving
credit facility could result in a termination of the commitments and
acceleration of all outstanding principal thereunder. As of June 30, 2020,
Transocean had no outstanding borrowings and $25 million of letters of credit
issued under its revolving credit facility.
Item 7.01 Regulation FD Disclosure.
Extension of Exchange Offers
On September 8, 2020, Transocean announced that, as a result of the interference
caused by the filing of the TRO and Injunction and the delivery of the Notice,
both of which Transocean believes are meritless, Transocean has elected to
extend the Exchange Offers until 5:00 p.m., New York City time, on September 9,
2020, to provide eligible holders of Existing Notes the opportunity to continue
to support Transocean and participate in the Exchange Offers.
A copy of Transocean's press release is furnished herewith as Exhibit 99.1 to
this Current Report on Form 8-K and is incorporated herein by reference. The
information contained in this Item 7.01 and Exhibit 99.1 hereto shall not be
deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and shall not be incorporated by
reference into any filings under the Securities Act of 1933, as amended (the
"Securities Act"), or the Exchange Act, except as may be expressly set forth by
specific reference in such filing.
Item 8.01 Other Events
Successful Dismissal of Requests for Temporary Restraining Order and Preliminary
Injunction
On September 2, 2020, Whitebox, as a holder of Transocean Inc.'s Existing 2025
Guaranteed Notes, 7.50% Senior Notes due 2026, the Existing 2027 Guaranteed
Notes and 6.80% Senior Notes due 2038 (the "Plaintiffs") filed a complaint in
the Court seeking the TRO and Injunction and alleging that Transocean made
material misstatements and omissions in the Exchange Offer Memorandum. The claim
was based on an allegation similar to the one underlying the Notice described
above: that Transocean allegedly breached the indentures governing the Existing
2025 Guaranteed Notes and the Existing 2027 Guaranteed Notes because the
Structurally Senior Guarantors should have provided a guarantee for the Existing
2025 Guaranteed Notes and the Existing 2027 Guaranteed Notes; and that the
purported obligation to provide such guarantees should have been disclosed in
the Exchange Offer Memorandum.
Consistent with its position with respect to the Notice and the lack of merit of
the allegation therein, Transocean strongly disagrees with the allegation by the
Plaintiffs in its lawsuit. On September 3, 2020, Transocean, as defendant, and
Whitebox, as plaintiff, each presented its arguments regarding Whitebox's
request for the TRO and Injunction to the Court. At the hearing, the Court
promptly denied the Plaintiffs' TRO and Injunction request. Transocean will
continue to defend itself vigorously against such lawsuit and any related future
claims, which it believes are meritless.
Item 9.01Financial Statements and Exhibits
(d) Exhibits.
Exhibit No. Description
99.1 Transocean Ltd. Announces Successful Court Ruling, Extension of
Exchange Offers and Current Exchange Results
101 Interactive data files pursuant to Rule 405 of Regulation S-T formatted
in Inline Extensible Business Reporting Language
104 Cover Page Interactive Data File (formatted as inline XBRL).
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