Transocean faces potential liquidity issues as lawsuit is filed against subsidiary

A lawsuit has been filed against an indirect subsidiary of Transocean which could affect its ability to draw on a $3bn revolving credit facility.

Global Marine has had a lawsuit filed against it by Wilmington Trust Company, in its capacity as trustee, seeking a judgment that Global Marine is in default on its $300m of outstanding 7.00% notes due June 2028.

Transocean said it believes that Global Marine is in compliance and disagrees with the assertions in the lawsuit, which appears to be linked with its acquisition of Songa Offshore.

While the notes are not guaranteed by Transocean, it did warn that in  an event of default Global Marine could be obligated to pay prior to scheduled maturity the principal amount of notes outstanding. Any acceleration of the amounts due could result in a default of 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,” Transocean said in a form 8-k filing.

Transocean said it intends to vigorously defend the lawsuit.