A few years ago, Seadrill was John Fredriksen’s by far the most valuable asset. Now analysts believe that the company will disappear completely.
On Friday, Seadrill announced via a stock exchange announcement that the company lost NOK 5.5 billion in the first half of the year.
The rig industry has long struggled to strike back after the oil crisis from 2014, and many received a big blow when the oil price plunged again in the spring of 2020.
Seadrill, which at one time was the world’s largest rig company, is no exception: The John Fredriksen-owned rig company is undergoing a major restructuring, after the company had to apply for bankruptcy protection in 2020.
At most, before the fall in oil prices in 2014, the company had been almost NOK 150 billion.
Now DNB Markets analyst Martin Huseby Karlsen tells Finansavisen that the process means the hook on the door for Seadrill.
– I do not think Seadrill exists in six months, says Huseby Karlsen to Finansavisen.
The seas: John Fredriksen’s Seadrill lost NOK 5.5 billion in the first half of the year
Will scroll up to secure the Seadrill fleet
Finansavisen talks to sources who say that Transocean and Dolphin Drilling have submitted a joint bid of NOK 15.4 billion for Seadrill’s fleet – and the duo should not be the only ones interested.
Analyst Huseby Karlsen believes Seadrill’s fleet will be sold in several parts after the extensive restructuring is completed. It may take several months.
– Transocean is a desperate buyer because the company must reduce its debt ratio. One way to do this is to get more rigs into the fleet and issue shares as payment. Dolphin, on the other hand, must secure more rigs – otherwise it is not life-saving. These are motivated buyers, but I think the outcome for Seadrill’s part will be a restructuring and a more structured sales process afterwards, says Huseby Karlsen to Finansavisen.
Also read: John Fredriksen resigns as chairman of the board of Seadrill
Fredriksen has sold down
Seadrill ended up with an operating profit before interest, taxes, write-downs and depreciation of $ 20 million in the first half of 2021. The order backlog is now $ 2.1 billion, equivalent to NOK 19 billion.
At the end of July, Seadrill sent out a stock exchange announcement that John Fredriksen was selling 100,000 shares in the company through the investment company Hemen Holding. Thus, he now owns around 25 percent of the shares in Seadrill Limited.
The Seadrill share moved for a period this summer like a yo-yo on the stock exchange, with an impact of up to 25 percent from day to day. This happened after a rescue plan came into place, where Seadrill reached an agreement with key lenders on a plan that ensured further operation.
The plan means that the debt will be reduced by around five billion dollars and that around 350 million dollars in fresh capital will be raised. The banks and funds that take over Seadrill convert around 85 per cent of the debt into share capital. Some lenders will also provide the company with $ 300 million in new capital as loans.
The plan means that the current shareholders are left with around 0.25 percent of the ownership and will be left with crumbs.
The seas: Fredriksen share with huge growth on the stock exchange – Alfie Haaland buys up
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