Seadrill Exits Chapter 11

Posted by Joseph Keefe
Monday, July 2, 2018
Offshore drilling rig contractor Seadrill said on Monday it had successfully completed its reorganisation, emerging from a U.S. Chapter 11 bankruptcy process launched last September.
 
The company, once the world's largest offshore driller by the market capitalisation, was forced to seek protection from creditors when it was unable to repay its debts amassed during boom years to buy new rigs.
 
When oil prices fell in 2014, oil companies cancelled or postponed exploration plans to save cash which reduced demand for offshore drilling rigs.
 
Prices have partly recovered since hitting a low in January 2016, and demand for drilling rigs, especially in the North Sea, has increased, giving more hope for such firms as Seadrill.
 
To reduce its debts, the company pushed forward maturities of $5.7 billion bank loans, equitised about $2.4 billion in unsecured bonds and $1 billion in obligations for newly built rigs.
 
It also raised more than $1 billion in fresh capital by issuing $880 million in new secured bonds and $200 million in new equity under the plan approved on April 17.
 
"We are pleased to be emerging from Chapter 11 and moving forward with a solid financial foundation on which we will continue to grow and strengthen our business," John Fredriksen, Norwegian-born billionaire, who will remain the company's main shareholder and its chairman, was quoted as saying in a statement.
 
Seadrill said it had emerged from bankruptcy proceedings with a total cash of around $2.1 billion and a $2.3 billion in order backlog. The first bank loan maturities are not until 2022.
 
The company said has received approval to list its new common shares on the New York Stock Exchange under the same ticker symbol "SDRL", and it plans to continue to have a dual listing in Oslo.
 
Trading in about 16 million new shares issued to existing shareholders and holders of unsecured claims will commence in New York on July 3, it added.
 
Current Seadrill's shareholders will receive 1.9 percent of newly issued shares.
 

The company plans to report on its first-half year and third-quarter results in November, using so-called "fresh start" principle, re-measuring its assets and liabilities.

 

Reporting by Nerijus Adomaitis

Categories: Contracts Legal Offshore Finance Energy Offshore Energy

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