Diamond Offshore (No_rec, TP: USD) - First mover
After it missed a mid-April interest payment (and has further coupon payments due in May), Diamond Offshore filed for Chapter 11. We expected a wave of financial restructuring and Chapter 11 filings across the offshore drillers. Still, as others have more pressing situations than Diamond Offshore, we had expected other contractors to be first. We believe being first is a good move, providing the operational business with competitive advantages and positioning it for upcoming industry consolidation. As the market cap is now a tiny part of the EV and equity recovery is probably very limited in Chapter 11, we have moved to NO REC (HOLD) and withdrawn our target price (USD2.00).Diamond Offshore Drilling provides contract drilling services to the energy industry around the globe. The company's fleet enables it to provide services in the floater market on a worldwide basis. The company's contracts to provide offshore drilling services vary in their terms and provisions. The principal markets for the company's offshore contract drilling services are: the Gulf of Mexico, including the U.S., and Mexico; South America, principally offshore Brazil, and Trinidad and Tobago; Australia and Southeast Asia, including Malaysia, Indonesia, Myanmar and Vietnam; Europe, principally offshore the U.K., and Norway; East and West Africa; and the Mediterranean.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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