John Fredriksen-controlled offshore driller Seadrill could be out of bankruptcy protection in two months after having its restructuring plan approved by the US bankruptcy court in Texas.
With the latest developments and majority creditors already backing the plan, Seadrill said it has set a target to exit the chapter 11 proceedings in approximately 60 days, avoiding bankruptcy for the second time in just over three years.
“Confirmation of the plan by the court is a watershed moment for Seadrill and one we should celebrate as we move into the final stages to emerge from chapter 11,” said Stuart Jackson, Seadrill CEO.
Seadrill’s financial rescue plan will see the company raise $350m in new financing and reduce its liabilities by over $4.9bn. Existing shareholders will retain 0.25% of the company. The lenders who have accepted the deal will guarantee a loan facility of $300m and will be entitled to approximately 17% of the newly constituted Seadrill. They will also convert some $5.6bn of debt into second-priority loans of $750m and around 83% of the company’s shares.
John Fredriksen should remain with Seadrill with an unsecured bond loan of $50m, convertible into 5% of the new equity.
Seadrill owns 34 and manages 11 drilling rigs on behalf of SeaMex, Northern Ocean, Sonadrill and Aquadrill Offshore.