FT - Seadrill, one of the world’s largest offshore drilling companies, filed for bankruptcy after it secured agreement from nearly all of its banks to support a plan to inject $1bn in new capital and all but wipe out existing shareholders.
The company, controlled by billionaire ship owner John Fredriksen, has been struggling ever since the 2014 crash in oil prices and has been working with its creditors for 18 months in search of a deal to restructure almost $10bn in debt.
The proposal would see $5.7bn of bank debt extended by about five years with no amortisation payments due until 2020. Holders of $2.3bn in bonds would be offered about 15 per cent of equity in the newly restructured company. Existing shareholders would receive just 2 per cent.
The plan has the support of 97 per cent of Seadrill's senior lenders, 40 per cent of its bondholders and a group of investors led by Mr Fredriksen. The fresh capital will consist of $200m in equity and $860m in secured notes.
Anton Dibowitz, chief executive, said of the backing for the proposal: "This is a testament to our position in the sector, having a large, modern fleet, a top-quality customer base and a proven operating record. With our improved capital structure, we will be in a strong position to capitalise when the market recovers."
Seadrill became the crown jewel in Mr Fredriksen's business empire but its shares have lost 99 per cent of their value since 2014. The world's most influential shipowner described attempts to restructure the debt as the most complicated transaction of his career earlier this year.
Seadrill's bankruptcy is only the latest sign of upheaval in the offshore drilling market. Hercules and Paragon have both filed for bankruptcy while there are signs of consolidation among the remaining operators. Transocean is paying $1.1bn for Norway's Songa Offshore while US rival Ensco is buying Atwood Oceanics. Maersk Drilling, the offshore rig unit of the Danish conglomerate, will either be sold or spun off in the next year.
Seadrill acted now because it has a bond worth $895m coming due on Friday. It filed for Chapter 11 protection in the Southern District of Texas late on Tuesday. It applied for so-called first day motions, which allow it to continue day-to-day operations as normal, and said it had about $1bn in cash.
Seadrill has 32 operating rigs but 20 more that are currently idle. It is in talks with several rig builders, including Samsung Heavy Industries, about delaying delivery of two new rigs after reaching a similar deal with Cosco over one vessel.
Kirkland & Ellis is acting as legal counsel, Houlihan Lokey as financial adviser and Alvarez & Marsal as restructuring adviser.
SEADRILL RESTRUCTURING SEADRILL RESTRUCTURING Comprehensive restructuring plan will require a substantial impairment or conversion of our bonds, as well as impairment, losses or substantial dilution for other stakeholders. As a result, the Company cu ...
SEADRILL NET INCOME $127 MLN SEADRILL NET INCOME $127 MLN Highlights • Revenue of $667 million • Operating income of $118 million • EBITDA of $354 million • 99% economic utilization • Reported net income of $127 million and diluted net income per sha ...
SEADRILL NET LOSS $656 MLN SEADRILL NET LOSS $656 MLN Highlights: - Revenue of $743 million - Operating income of $247 million - EBITDA of $441 million - 95% economic utilization - Reported Net Loss of $656 million and diluted loss per share of $1.29 ...
SEADRILL ACHIEVED 95% SEADRILL ACHIEVED 95% In the face of the severe downturn in our industry our priorities for 2016 are to conserve cash and address our financing needs. We have a modern competitive fleet, a proven track record in operations and e ...
SEADRILL 2Q 2015 RESULTS SEADRILL 2Q 2015 RESULTS Revenues for the second quarter of 2015 were $1,147 million compared to $1,244 million in the first quarter of 2015. Operating profit for the quarter was $384 million compared to $703 million in the p ...
ROSNEFT & SEADRILL WILL EXTEND ROSNEFT & SEADRILL WILL EXTEND North Atlantic Drilling Ltd. (NADL), the rig company controlled by billionaire John Fredriksen, will extend a deadline to complete deals with Russia’s OAO Rosneft (ROSN) that include $4.25 ...
РОСНЕФТЬ СОГЛАСНА ROSNEFT & SEADRILL: FAMILY Роснефть и North Atlantic Drilling подписали соглашение об обмене активами Rosneft signs deal with NAD for land drilling rigs in Russia
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U.S. Rig Count is up 330 rigs from last year's count of 593, with oil rigs up 273, gas rigs up 58, and miscellaneous rigs down 1 to 0. Canada Rig Count is up 41 rigs from last year's count of 174, with oil rigs up 13, gas rigs up 30, and miscellaneous rigs down 2 to 2.