Item 2.02Results of Operations and Financial Condition
The information set forth under Item 7.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 7.01Regulation FD Disclosure
Pacific Drilling S.A. (the “Company”) has elected not to make the approximately $31.4 million interest payment (the “First Lien Interest Payment”) due and payable on October 1, 2020 with respect to its 8.375% First Lien Notes due 2023 (the “First Lien Notes”) and the approximately $19.6 million PIK interest payment (the “Second Lien PIK Interest Payment” and, together with the First Lien Interest Payment, the “Interest Payments”) due and payable on October 1, 2020 with respect to its 11.0%/12.0% Second Lien PIK Notes due 2024 (the “Second Lien PIK Notes” and, together with the First Lien Notes, the “Notes”).
Under the indentures governing the Notes, the Company has a 30-day grace period to make the Interest Payments before such non-payment constitutes an “event of default” with respect to the Notes. The Company’s election to use the grace period did not trigger a cross-default under any of the Company’s debt obligations as the Company has obtained any necessary waiver or consent. The Company has elected to use the 30-day grace period, which expires on October 31, 2020, to continue its discussions with certain of its creditors regarding the terms of a potential consensual comprehensive restructuring of its indebtedness, which may be under the protection of Chapter 11 of the U.S. Bankruptcy Code. No agreement has yet been reached, and the Company cannot provide any assurance whether, or when, the Company will reach an agreement with such creditors or as to the terms of any such agreement. As of September 30, 2020, the Company had approximately $218 million of cash and cash equivalents and $6 million of restricted cash.
The information contained in Items 2.02 and 7.01 of this Current Report on Form 8-K shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, and unless the Company specifically incorporates the information by reference in a filing, such information shall not be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, regardless of any general incorporation language in such a filing.
Forward-Looking Statements
Certain statements and information contained in this Current Report on Form 8-K constitute “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and are generally identifiable by their use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “our ability to,” “may,” “plan,” “potential,” “predict,” “project,” “projected,” “should,” “will,” “would”, or other similar words which are not generally historical in nature. The forward-looking statements speak only as of the date such statements are made, and the Company undertakes no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
The Company’s forward-looking statements express the Company’s current expectations or forecasts of possible future results or events, including the Company’s ability to negotiate a consensual comprehensive restructuring transaction with certain of its creditors; the future impact of the COVID-19 pandemic on the Company’s business, future financial and operational performance and cash balances; the Company’s future liquidity position and future efforts to improve its liquidity position; revenue efficiency levels; market outlook; forecasts of trends; future client contract opportunities; future contract dayrates; the Company’s business strategies and plans or objectives of management; estimated duration of client contracts; backlog; expected capital expenditures; projected costs and savings; expectations regarding the Company’s two subsidiaries’ application to appeal the arbitration award against them related to the drillship known as the Pacific Zonda in favor of Samsung Heavy Industries Co. Ltd. (“SHI”), the outcome of such subsidiaries’ ongoing bankruptcy proceedings and the potential impact of the appeal tribunal’s decision on the Company’s future operations, financial position, result of operations and liquidity.
