Valaris PLC, the largest offshore drilling and well drilling company in the world, filed for bankruptcy on August 19th 2020, with an FHR of 18, Very High Risk. Valaris owns 61 rigs, including 45 offshore jackup rigs, 11 drillships, and 5 semi-submersible platform drilling rigs. At the time of default the comapny had over $15 billion in total assets.
| FHR at time of default: 18, Very High Risk |
What The Ratings Tell You
The company's ratings placed it squarely in Quadrant C, which occurs when both a CHS (Core Health Score) and FHR are below 40.
“Quadrant C: These companies demonstrate poor to very poor Core Health (suggesting the need for improved efficiency), and a high to very high risk of default within the next 12 months.”
Where Our Analysis Tells The Story
The reports show the company having Weakness in each of the performance categories, Leverage, Liquidity and Earnings Performance. This is reflected in key ratios shown in the Peer Benchmark Report. Examples include:
- Cash to Current Liabilities: 15%
- Operating Cash Flow to Current Liabilities: -47%
- Return on Assets: -1%
- Debt to Assets: 36%
- Operating Profit to Interest Expense: -1.5x