Proposes to cut Seadrill debt by NOK 41 billion – E24

Proposes to cut Seadrill debt by NOK 41 billion – E24
Proposes to cut Seadrill debt by NOK 41 billion – E24

In a proposal sent to the court in Texas, the rig company Seadrill will cancel debts equivalent to 41 billion kroner. If the proposal is approved, the current shareholders will be left with 1 percent of the company.

Investor John Fredriksen is the largest shareholder in crisis-stricken Seadrill.

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byoutline Håkon Mosvold Larsen / NTB

Published: Published: Just now

At the beginning of the Easter weekend, a restructuring proposal was sent out from John Fredriksen’s Seadrill to the Chapter 11 court in Houston Texas, writes Finansavisen.

The company in crisis has applied for US bankruptcy protection for the second time in less than four years.

In the proposal, a debt reduction corresponding to 86.5 per cent is on the table. The proposal should already be clarified with Seadrill’s banks, which have accepted the debt cut, according to the newspaper.

If the proposal is adopted, the current shareholders will be left with 1 percent of the company, while the lenders will take the remaining 99 percent.

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John Fredriksen’s Seadrill is seeking bankruptcy protection in the USA

New capital as part of the solution

– The proposal from Seadrill means that the current lenders to the company will have a preferential right to inject the proposed 300 million dollars in new financing, says the rig company’s chairman Glen Ole Rødland to Finansavisen.

He then refers to a proposed capital raising of 300 million dollars, equivalent to 2.5 billion kroner.

– If the lenders agree on the proposed financing and they themselves do not want to increase their exposure by the full amount – 300 million dollars – it is natural to offer the right to contribute new capital to other investors or lenders to ensure subscription of the entire amount , he says.

The remaining debt of 750 million dollars is intended to be collected in a loan agreement, rather than many different agreements as today.

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Crisis hit for the second time

In 2018, Seadrill rose after a bankruptcy protection. The debt had been cut and with fresh money there was hope that the future was secured.

But in February this year, the company again applied for bankruptcy protection (so-called Chapter 11). This is for both Seadrill and the company’s subsidiaries, with certain exceptions.

Seadrill writes in the report that the exception from the application for bankruptcy protection is only Seadrill New Finance Limited and its 13 subsidiaries.

“We work closely with our shareholders to ensure that we achieve an outcome that gives us the flexibility to overcome the bottlenecks in our industry’s cycles, while also positioning ourselves well for the market to return,” says CEO Stuart Jackson in the message sent. out in February.

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Published: April 3, 2021 10:46 AM

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