John Fredriksen’s Seadrill, saddled with debts and liabilities of around $14bn, has now admitted chapter 11 proceedings cannot be ruled out as it fights to push through complex restructuring.
In its Q4 results today, Seadrill, whose share price has nosedived 92% since 2014, warned: “In the event a consensual restructuring agreement is not concluded or an agreement to an extension is not reached, we are also preparing various contingency plans, including potential schemes of arrangement or chapter 11 proceedings.”
Seadrill and its creditors have set an April 30 deadline to reach consensus on restructuring. Last month senior management at the company admitted negotiations had proved complex.
In a rare interview with the Financial Times earlier this month, Fredriksen vowed to see through the restructuring of his troubled rig unit. Fredriksen said Seadrill was his most complicated transaction he has been involved in during his half century in shipping.
Trying to put a more optimistic slant to today’s announcement, Per Wullf, CEO and president of Seadrill, said: “Improving dayrates will not be a feature of 2017, however, based on the expected level of scrapping and cold stacking activity we believe there is room for some optimism.”