By Jite Eriabie
As expected John Fredriksen’s rig owning company Seadrill has filed for a Chapter 11 bankruptcy restructuring.
Seadrill said it had entered into a restructuring agreement with 97% of its bank lenders, 40% of bondholders and a consortium of investors, the largest of which is Fredriksen’s Hemen Holdings, that would be implemented via pre-arranged Chapter filings.
Seadrill said the restructuring plan had been developed over a year of negotiations and will see an injection of $1.06bn in new capital comprising $860m in secured notes and $200m in equity. The company’s banks have deferred maturities on $5.7bn in debt facilities for five years with no amortization payments until 2020.
If Seadrill gains the support of unsecured creditors $2.3bn of unsecured bonds and other unsecured claims will be converted into approximately 15% of the post-restructured equity.
“The restructuring agreement we signed today is a comprehensive plan that raises over $1bn of new capital, is underpinned by Hemen Holding Ltd, our largest shareholder, and is overwhelmingly supported by our banks and approximately 40% of our bondholders. This is a testament to our position in the sector, having a large, modern fleet, a top-quality customer base and a proven operating track record,” said Anton Dibowitz, ceo and president of Seadrill Management.
“With our improved capital structure, we will be in a strong position to capitalise when the market recovers.”
Seadrill filed pre-arranged Chapter 11 case in the Southern District Court of Texas on 12 September to implement the restructuring.
“Specifically, the company requested authority to pay its key trade creditors and employee wages and benefits without change or interruption. Additionally, the company expects it will pay all suppliers and vendors in full under normal terms for goods and services provided during the chapter 11 cases,” Seadrill said.