Seadrill files for Chapter 11 bankruptcy
Oslo-listed offshore drilling contractor Seadrill has filed for bankruptcy in Texas federal court, marking the start of its second cycle of Chapter 11 protection in four years.
Five of Seadrill’s Asian subsidiaries filed for bankruptcy in the Southern District of Texas earlier this week. On Wednesday, the company’s board of directors announced that Seadrill itself and most of its consolidated subsidiaries have filed for Chapter 11, with the exception of Seadrill New Finance Limited and a dozen others. units.
The documents filed on the first day ask the court to give the company the power to continue paying its trade creditors and employees. The company says it has $ 650 million in cash and expects to meet its normal obligations to its workforce and suppliers without interruption during bankruptcy proceedings.
The cases in Chapter 11 aim to ensure the continuation of operations for the Seadrill fleet through a restructuring of the balance sheet. The company expects this to result in a significant debt-for-equity swap, which “will likely result in minimal or no payback for current shareholders.” Seadrill is a company registered in Bermuda, and the courts in Bermuda will likely have a supervisory role in the proceedings.
“This announcement marks the start of the court-supervised process that will create a financially viable business over the long term. We are working closely with our stakeholders to ensure that we achieve an outcome that gives us the flexibility to overcome weaknesses in the business. our industry cycles, while also positioning ourselves well for the market recovery, “said Stuart Jackson, CEO of Seadrill.” I would like to thank all of our stakeholders for their continued support as we move forward in this legal process, in particular our customers, suppliers and employees, all of whom demonstrate ongoing support. “
Seadrill entered into a series of forbearance agreements with its major creditors last year, but the last expired on January 29. He had sought the consent of several of his bankers to delay the payment of $ 5.7 billion on his total debt of $ 7.3 billion. Most of this debt will likely be converted to equity, eliminating existing shareholders.
Seadrill filed for bankruptcy in 2017, nearly wiping out its shareholders in a pre-arranged deal that gave the company $ 1 billion in new financing and relieved it of $ 2.4 billion in un-bond debt. guarantee. An additional $ 5.7 billion in bank loans have seen their maturities extended until 2022.