Seadrill Ltd (OTCMKTS: SDRLF) has issued several warnings to drilling contractors that it may indicate trouble if they proceed with bankruptcy. One group advises the company to sell, while the other is pushing for a corporate reorganization.
Filing for Second Bankruptcy: As per the management, two groups requested Seadrill Ltd to extend or push back its filing period by four months to file a Chapter 11. Seadrill Ltd is being represented by Kirkland & Ellis, filed second bankruptcy in February with $5.6 billion secured debt, stating the downturn in the O&G (oil and gas) business and the impact of pandemic (COVID-19) on the economy. To service the debt on the book, the company is looking to reorganize the business activities or sell certain assets in the time to come.
Restructuring of notes: Given the downturn in the business, Seadrill Ltd, also the issuer of 12% senior secured notes, are in discussion with the various investors for the proposed restructuring of notes which is expected to be due in 2025. The agreement allows the issuer and stakeholders to negotiate terms and conditions regarding the restructuring of notes. In addition, the company also indicated the liquidation of SeaMex Ltd Joint Venture.
SeaMex appointed joint provisional liquidators on the Supreme Court order. As per the management, the appointment of a liquidator will benefit the company from funding and help restructure SeaMex’s balance sheet to protect all the stakeholders (employees, customers, shareholders, and suppliers) value.
Glen Ole Rødland steps down as Chairman: The company announced that Mr. Glen has stepped down from Chairman’s position with immediate effect. However, the company CEO, Mr. Jackson, said that the company will continue to discuss the restructuring or sale of assets with their lenders. The company also remains focused on strengthening the balance sheet and lower the debt through efficient operations.