Seadrill plans Chapter 11 debt revamp
OSLO: Offshore drilling contractor Seadrill plans to launch a Chapter 11 debt restructuring by September 12, and aims to raise US$1 billion (RM4.28 billion) in new capital, it said yesterday.
Once the biggest offshore rig company by market value and the crown jewel of Norwegian billionaire John Fredriksen’s business empire, Seadrill shares have plunged 99 per cent from a 2013 peak as energy firms have slashed spending to cope with lower prices.
The Chapter 11 process provides a company with protection from creditors while it seeks to renegotiate its debts and secure its future.
“Our primary objective at the moment is concluding final negotiations on our comprehensive restructuring plan, which is at an advanced stage and likely to be implemented via Chapter 11 proceedings on or before 12th September this year,” said Seadrill chief executive officer Anton Dibowitz.
The company has postponed a number of deadlines for debt restructuring, but some analysts believe this time could be different.
Larsen estimates Seadrill's total debt and liabilities, including about US$2 billion to shipyards, at more than US$10 billion.
Net interest bearing debt alone stood at almost US$8 billion at the end of the second quarter, said the deepwater drilling contractor.
Seadrill said the restructuring plan was likely to involve raising about a billion dollars of new capital, as well as a five-year extension of its bank facilities and “substantial” impairment or conversion of its bonds into equity.
Other stakeholders, including shipyards, will have to take some pain as well.
“As a result, the company currently expects that shareholders are likely to receive minimal or no recovery for their existing shares,” said the company. Reuters