RIG stock: Jan. 2021 article | Debt issue

August 3, 2021

Here are highlights:

1. 1.7 billion of cash 
2. 1.3 billion of available credit
3. strong contract backlog, it expects to generate between $900 million to $1.1 billion of operating cash flow over the next two years
4. RIG - 1.7 billion of capital spending requirements and $1.5 billion of debt maturing through the end of next year. 
5. Liquidity - burn through 
6. Options: Debt exchanges and new secured financing on some of its vessels 
7. bankruptcy to restructure its liability and gains some more breathing room 

Nearly the entire offshore drilling industry filed for bankruptcy last year. One of the few companies left standing is Transocean (NYSE:RIG). However, the company is teetering on the brink, given its near-term financial commitments.

On the one hand, Transocean has $1.7 billion of cash and short-term investments along with $1.3 billion of available credit. Meanwhile, thanks to its strong contract backlog, it expects to generate between $900 million to $1.1 billion of operating cash flow over the next two years. However, Transocean has $1.7 billion of capital spending requirements and $1.5 billion of debt maturing through the end of next year. It's on track to burn through most of its liquidity. While the offshore driller is looking at various options -- like debt exchanges and new secured financing on some of its vessels -- it might have no choice but to file for bankruptcy to restructure its liabilities and gain some more breathing room.