Seadrill will cut its debt by $ 4.8 billion

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In a proposal Seadrill has submitted to the bankruptcy court in Houston, Texas, it is proposed to dilute the shareholders’ ownership to one percent of the company, and let the lenders take over the rest. This restructuring will help the drilling company cut its debt by more than 86 percent:

From 4.8 billion dollars down to 750 million dollars, ie from approximately 41 billion kroner to 6.4 billion kroner.

The proposal comes as a consequence of Seadrill having applied for bankruptcy protection in Texas, something the company first announced in February. The restructuring proposal on the court’s table has been named “Project Paratus”.

It was Finansavisen that first mentioned the restructuring proposal submitted just before the Easter weekend.

The goal is to keep the company together

In the proposal that DN has been given access to, it is specified that the documents are confidential, and parts of the proposal have been skimmed.

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Glen Ole Rødland, who took over as chairman of the board when John Fredriksen resigned in 2019, told DN earlier in March that all parties are involved in debt negotiations which primarily seek a solution where the company remains united.

– We need consolidation, not fragmentation, Rødland told DN earlier in March.

Rødland and colleague Gunnar Eliassen then pointed out that the value of the operating organization in the company has risen relative to the pure rig values ​​after the collapse in the industry, and that it is something they want to include if there is a consolidation wave of historical proportions with acquisitions and mergers.

Watering out Fredriksen

John Fredriksen resigned as chairman of the board of Seadrill in 2019, but has so far still been the largest owner in the company with a share of just over 30 percent.

If “Project Paratus” goes through, his ownership will be almost watered down. It is proposed to inject 300 million dollars, ie almost 2.5 billion kroner, to save the company – and this is the lenders who will have the preferential right to inject, it appears from the proposal.

However, the lender is not obliged to use the opportunity, if it is not possible or the person does not want to. Then the opportunity becomes available to others, Rødland confirms to Finansavisen.

– If the lenders agree with the proposed financing and they themselves do not want to increase their exposure by the full amount, $ 300 million, 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 to Finansavisen.

According to the proposal, the money will be available by September this year.

Rødland emphasizes to Finansavisen that if the lenders agree with the proposed financing and do not want to increase their share, then they can pass on the opportunity.

Before Easter, the Seadrill share was traded for NOK 1.92, down almost 40 percent from 15 February.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases using a link, which leads directly to our pages. Copying or other form of use of all or part of the content, can only take place with written permission or as permitted by law. For further terms see here.



Seadrill bankruptcy protection. DN investor. (Photo: DN)
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