Seadrill and more than 80 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of Texas, lead case number 17-60079. The Company, which provides offshore drilling services, is represented by Matthew D. Cavenaugh of Jackson Walker.
As part of the restructuring process, Seadrill has “ring-fenced” its non-consolidated affiliates from the Company’s restructuring, including Seadrill Partners LLC, SeaMex Ltd., Archer Limited and their respective subsidiaries. These non-consolidated affiliates did not file Chapter 11 cases, and the Company anticipates that their business operations will continue uninterrupted.
Concurrent with its Chapter 11 filing, the Company announced its entry into a restructuring agreement with more than 97% of its secured bank lenders, approximately 40% of its bondholders and a consortium of investors led by its largest shareholder: Hemen Holding. The agreement delivers $1.06 billion of new capital comprised of $860 million of secured notes and $200 million of equity. Seadrill’s secured lending banks have agreed to defer maturities of all secured credit facilities, totaling $5.7 billion, by approximately five years with no amortization payments until 2020 and significant covenant relief. Assuming unsecured creditors support the Plan, the Company’s $2.3 billion of unsecured bonds and other unsecured claims will be converted into approximately 15% of the post-restructured equity with participation rights in both the new secured notes and equity, and holders of Seadrill common stock will receive approximately 2% of the post-restructured equity.
To implement the restructuring agreement, Seadrill filed with the Court a Joint Chapter 11 Plan of Reorganization and related Disclosure Statement. As of the petition date, Seadrill has more than $1 billion in cash and does not require debtor-in-possession financing.
Anton Dibowitz, C.E.O. and president of Seadrill Management, comments, “The restructuring agreement we signed today is a comprehensive plan that raises over $1 billion of new capital, is underpinned by Hemen Holding Ltd., our largest shareholder, and is overwhelmingly supported by our banks and approximately 40 percent 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. With our improved capital structure, we will be in a strong position to capitalise when the market recovers.”
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