CCTV Transcripts

CCTV Script 27/04/20

⁠— This is the script of CNBC's news report for China's CCTV on April 27, 2020, Monday.

Diamond offshore, the latest company to file for bankruptcy protection, is a major offshore drilling contractor with significant operations in the Gulf of Mexico, the company had revenue of $981 million last year and employs about 2,500 people, according to the filing.

But after a price war and COVID-19 outbreak sent oil prices plummeting, a number of crude producers shut down their Wells in the Gulf of Mexico, leaving the company with a near-dried up demand.

Since the start of the year, the company's shares have fallen 86.95% to trade below $1, or 94 cents, at Friday's close.

Diamond offshore has about $5.8 billion in registered assets and about $2.6 billion in liabilities. The company recently missed interest payments on its debt.  Last Friday, Standard & Poor's downgraded its debt to D, meaning the company may not pay its debt. The company then formally filed for bankruptcy protection on Sunday. It also became the second oil company to come under the spotlight after Whiting.

US energy companies have been hit hard in recent days as oil prices have fallen into negative territory. US President Donald trump has asked the energy and Treasury departments to come up with a strategy to help them weather the crisis.

On Friday, Treasury secretary Steven Mnuchin said Trump was considering a variety of options, including early purchases of fuel, early purchases of airline tickets and federal purchases of shares in energy companies. Earlier, the Director of the White House's national economic council, Kudlow, had said trump was considering buying stakes in energy companies. But such ideas face considerable controversy.

But energy companies may not be the only ones the Trump administration needs to bail out. Despite several rounds of stimulus pkg have been rolled out, bankruptcy is still inevitable.

The number of U.S. companies filing for bankruptcy protection rose 18 percent in March from a year earlier, according to the American bankruptcy association. The latest news is that century-old J.C. Penney is also discussing the details of a bankruptcy filing. It is impossible to predict how many companies will file for bankruptcy protection. For reference, between 2008 and 2010, after the financial crisis, more than 160,000 US companies filed for bankruptcy.

Notably, America's small-business restructuring law, which took effect in February, could further encourage bankruptcies. The new law favours letting companies retain ownership rather than handing it over to creditors, the judge can approve a restructuring that creditors oppose. In addition, it simplifies restructuring and prevents companies from being dragged down by lawyers' fees. We will keep an eye on this issue.