Seadrill’s Bankruptcy Exit Plan Receives US Court Approval

A U.S. judge stated April 17 he would authorize Seadrill Ltd.’s (NYSE: SDRL) plan to leave its Chapter 11 bankruptcy, where the worldwide overseas oil and gas drilling company would shed billions of dollars of debt and raise $1 billion in new financial investment. U.S. Bankruptcy Judge David Jones in Houston overthrew 2 small objections to the reorganization plan throughout a 90-minute hearing. The plan extends maturities on more than $5 billion of bank loans and converts about $2.3 billion in bond debt into equity in a restructured Seadrill.

In addition, the plan will raise about $1 billion in new debt and equity through a rights offering led by Seadrill’s biggest investor, John Fredriksen, and financial investment company Centerbridge Credit Partners LP. ” The company will have an incredible competitive benefit with the new balance sheet,” stated Spencer Winters, a lawyer for Seadrill with the Kirkland & Ellis, at the April 17 hearing. Seadrill, which takes on Nabors Industries Ltd. (NYSE: NBR) and Ocean Rig UDW Inc. (NASDAQ: ORIG), runs a fleet of more than 30 vessels and was once the biggest driller by market price. The company’s stock trades on the Oslo and New York stock exchanges and it has business workplaces worldwide. Following a deep drop in oil rates beginning in 2014, the overseas service market experienced an excess of capability and low market rates, an issue that sticks around today.

Seadrill declared bankruptcy in September.

Mark Morris, the company’s CFO, informed the court that Seadrill has a contemporary fleet, great security record and a strong customer base, but was strained with more than $10 billion in liabilities. “This was everything about repairing the balance sheet,” he stated. Seadrill had broad assistance from its lenders for its plan, and much of the settlement in the restructuring fixated a push by shareholders to offer a larger part of the $1 billion new financial investment. The company still has to complete numerous actions before it can leave bankruptcy, consisting of payments of charges and getting regulative approvals.

Closer Ties with Oil Service Firms

Seadrill intends to broaden relations with Schlumberger Ltd. (NYSE: SLB), the world’s biggest oil services company, and other providers to the worldwide oil and gas market, its CEO informed Reuters on April 18. Seadrill prepares to emerge from Chapter 11 bankruptcy procedures in late June or early July, CEO Anton Dibowitz stated. ” The verification is the most considerable turning point while doing so, and now we need to carry out the plan over 60-90 days. Undoubtedly, we want to do it as quickly as possible,” he included. Seadrill is currently complying with Schlumberger in India to use integrated services and might broaden this to other places and partners, although the company has no instant consolidation strategies. ” Equally, we remain in conversations with all significant oil service business, and if there are chances that makes good sense for both people, we will definitely captivate that,” Dibowitz stated.