Offshore drilling rig contractor Seadrill said on Monday it has proposed to creditors to turn over its stakes in oil services firms Archer and Seadrill Seabras to redeem its outstanding secured notes.
The company controlled by Norwegian-born billionaire John Fredriksen has been in talks with creditors since the end of last year over new debt restructuring.
Seadrill said it was approached by a group of noteholders in May about a potential deal, and it responded on Aug. 15 with the offer to transfer its stakes in Seadrill Seabras, a pipe-laying vessel contractor, and Archer, an oilfield services firm.
Seadrill held a 50% stake in Seadrill Seabras and a 15.7% stake in Archer as of the end of February, according to its annual report.
As part of its deal with creditors under U.S. Chapter 11 bankruptcy proceedings in 2018, Seadrill issued $880 million in new secured notes.
It had $476 million outstanding in secured notes at the end of last year, according to its annual financial report.
Seadrill said the deal with noteholders could be implemented either via a new Chapter 11 process or under the laws of Bermuda, where the company is registered.
Offshore rig contractors, such as Seadrill, have been hit by oil companies cutting spending as the COVID-19 pandemic hammered demand for oil.
Seadrill warned on Aug. 25 that ongoing efforts to restructure its debt could leave current shareholders with minimal or no ownership.
Fredriksen's Hemen Holding Limited is the largest shareholder in Seadrill with 27.1%, and it also has a 12.67% stake in Archer, according to Refinitiv Eikon data.
(Reporting by Nerijus Adomaitis; Editing by Susan Fenton)