Forbearance agreements inked between creditors and John Fredriksen’s Seadrill expired yesterday, leaving the drilling firm exposed to legal battles if it fails to make necessary payments on time.
In a release to the Oslo Bors, Seadrill said it continues to maintain its readiness to carry out a comprehensive restructuring of its balance sheet. Such a restructuring may involve the use of a court-supervised process.
Seadrill said it is still engaging in constructive discussions with its financial stakeholders in relation to potential further forbearances and the heads of terms of a comprehensive restructuring of its balance sheet. “Whilst no agreement has been reached at this point it is expected that potential solutions will lead to significant equitization of debt which is likely to result in minimal or no recovery for current shareholders,” Seadrill stated.
Seadrill has been in serious financial trouble for the last three years. In 2017, it filed for chapter 11 bankruptcy protection. In June this year the company delisted from the New York Stock Exchange as well as making plans to axe 30% of its staff. Earlier this month Seadrill Partners, a Seadrill limited liability company, also filed for chapter 11.
Fredriksen, 75, has described Seadrill’s restructuring as the most complex he has ever seen is in his whole career.