World’s Largest Offshore Rig Owner Files Bankruptcy

UK-based offshore drilling contractor Valaris has filed for bankruptcy protection in the United States, offering creditors to swap some $6.5 billion of its $7.8-billion debt pile for equity. The company is the largest offshore rig owner in the world. Valaris follows Diamond Offshore Drilling and Noble Corp in bankruptcy court as the offshore drilling segment suffers the hardest blow from the latest oil industry crisis. The company has been in luck: about half of its bondholders have agreed to the proposed deal, which will allow the company to clear up most of its debt, the Wall Street Journal reports, quoting Valaris chief executive Tom Burke as saying the pandemic was likely to cause an extended downturn in the industry. The offshore drilling industry has been pummeled hard by the pandemic and the oil price crash. Many analysts see a lot more bankruptcies down the road as most companies in the field are heavily leveraged, and demand for offshore drilling is extremely tight as E&Ps go into survival mode, cutting or postponing all non-essential expenses, including costly offshore drilling...MORE