Transocean’s subsidiary sued over breach of bond indenture

Offshore driller Transocean is facing a lawsuit that could have an adverse effect on its liquidity.

The company’s indirect subsidiary Global Marine has been sued by Wilmington Trust Company, over an alleged default under the indenture governing its $300 million of outstanding 7.00% Notes due June 2028.

Wilmington Trust has retained Pryor Cashman as co-counsel in the case.

According to Pryor Cashman, in 1998, Global Marine Inc. issued approximately $300 million of debt securities for which Wilmington acts as indenture trustee.

As indenture trustee, Wilmington alleges that beginning in 2004, Global Marine pursued a strategy of selling off its operating assets. That strategy culminated in 2016 when Global Marine allegedly breached various provisions of the indenture by completing the sale of substantially all of its assets.

Wilmington seeks a declaration that Global Marine’s asset sales violated the terms of the indenture and a judgment for all amounts due and owing under the indenture and debt securities as a result of Global Marine’s alleged breach.

Transocean disagrees

 

Transocean, which disagrees with the charge, said on Friday that the lawsuit had been filed on November 28.

“The company disagrees with the assertions in the lawsuit and believes that Global Marine is in compliance with the indenture and has meritorious defenses against these allegations, although it can make no assurance regarding the outcome of the lawsuit, including the actual amount that would be due in the event that the lawsuit is successful,” Transocean said.

According to Transocean, the notes are neither guaranteed by, nor recourse to, Transocean or other subsidiaries of the company.

However, Transocean has warned that if the court ultimately determines that an event of default had occurred, Global Marine could potentially be obligated to pay prior to scheduled maturity the principal amount of notes outstanding as well as other amounts under the indenture.

In addition, Transocean said, the acceleration of the amounts due under the indenture could, absent a waiver from the requisite lenders, result in an event of default under Transocean’s currently undrawn $3 billion revolving credit facility.

“Any requirement to pay all of the Global Marine notes prior to scheduled maturity or the inability of the company to access the company’s revolving credit facility, prior to their respective scheduled maturity dates, could have an adverse effect on the company’s liquidity position. The company intends to vigorously defend the lawsuit,” Transocean said.

Offshore Energy Today Staff

Share this article

Follow Offshore Energy Today

Posted on December 8, 2017 with tags .

Events>

<< Aug 2018 >>
MTWTFSS
30 31 1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31 1 2

FPSO World Congress 2018

This year’s FPSO World Congress will tap on this green shoots of recovery and will focus on practical strategies to address key project…

read more >

ONS 2018

Offshore Northern Seas (ONS) provides a platform for the presentation of the political, economic and technological issues involving…

read more >

FPSO World Congress 2018

The Congress will continue its global focus and will feature the biggest and most important names in the FPSO industry…

read more >

SPE Asia Pacific Oil & Gas Conference and Exhibition 2018

As the energy industry adapts to a new status quo operating under sustained low oil prices, there continues to be a need for the industry…

read more >

Jobs>

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply