Seadrill gets extra breathing time, braces investors and yards to take a hit

John Fredriksen’s Seadrill has won some much needed extra breathing space to get its restructuring plan in place. The rig company now has until September 12 to come up with a plan. The company has also received lender consent to extend the maturity date under a US$400m credit facility from August 31 until September 14.

“The Company is in advanced discussions with certain third party and related party investors and its secured lenders on the terms of a comprehensive recapitalization, which remain subject to further negotiation, final due diligence, documentation and requisite approvals,” Seadrill said in a release today, adding that implementation of a comprehensive restructuring plan will likely involve chapter 11 proceedings. Seadrill warned that the restructuring will require a substantial impairment or conversion of bonds, as well as impairment and losses for other stakeholders, including shipyards.

Shareholders are likely to receive minimal recovery for their existing shares, Seadrill stressed.

Norwegian tycoon Fredriksen has related in interviews this year how the restructuring of Seadrill has proven to be the most complex financial deal he has encountered in more than 50 years in shipping.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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