John Fredriksen’s rig outfit Seadrill has admitted restructuring is proving more complex than originally forecast and stakeholders face noticeable losses. Seadrill has been in discussions with creditors over the past 12 months about amending and extending some $8bn in first lien secured debt. Fredriksen’s private family concern Humen Holdings has promised to pump extra cash into the drilling firm, however no overall restructuring has been agreed by all parties.
Seadrill said in a release today that key goals of the company’s restructuring continue to be “building a bridge to a recovery and achieving a sustainable capital structure”.
Seadrill has proposed extending bank maturities to mature in the period from 2021 to 2023, reducing fixed amortization and amending financial covenants. On top of this, the company has also suggested extending the maturity of unsecured claims to mature in the period from 2025 to 2028 as well as raising at least $1bn in new capital.
Seadrill said it aims to get a consensus among creditors by the end of April, but was also preparing various contingency plans in the event no agreement is reached.
Importantly, Seadrill warned: “We expect that any comprehensive agreement that would be based on raising significant new capital is likely to result in significant dilution to current shareholders and potential losses for other financial stakeholders.”
Per Wullf, CEO and president of Seadrill Management, commented: “These negotiations have proved to be more complex than we had originally anticipated. Nevertheless, key stakeholders have demonstrated a clear desire to be part of a solution and with the right structure and terms we believe there is significant capital available to us. Seadrill is a great company with excellent people, assets and customers and we look forward to concluding a transaction that ensures Seadrill continues to be well positioned for the eventual recovery in the industry.”