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The Houston Bankruptcy Court has approved the rig company Seadrill’s plan to reorganize the company. It emerges from a message to the Oslo Stock Exchange late Friday night.
The plan sets out a roadmap for Seadrill to gain control of the debt, now that the company has already secured support from the majority of creditors.
– We are pleased with this development, which means that we are on our way out of chapter 11, says CFO Grant Creed in the report.
Chapter 11 means that the company is under temporary bankruptcy protection.
Creed emphasizes that the court has approved the company’s schedule and given the company permission to approve the creditors’ votes, which he says will open up for a significant improvement in the balance sheet in the accounts.
This is the plan
As Seadrill has won, the company can begin to gather broader support for the plan it presented on 24 July. The main points of the plan are that the bank debt of 5.6 billion dollars will be converted to 750 million, and that the creditors will have the first right to contribute with a new loan of 300 million dollars. In return, the lenders take over 99.75 percent of the shares in the company, while the current owners, including Fredriksen, get the crumbs that are left.
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But main owner John Fredriksen, who has fought for Seadrill to get through its second restructuring since 2018 without it being broken up, will also be involved: he contributes with a convertible loan of 50 million dollars that can give him five percent of the shares .
The plan is supported by 58 percent of creditors, but needs two-thirds of each of the company’s 12 loans.
Fight against vultures
Ever since Seadrill’s bankruptcy process began in February, the hedge fund company Strategic Value Partners has distinguished itself as the most aggressive creditor.
SVP has all the way pushed for Seadrill to sell rigs – and then preferably to SVP’s own rig company Dolphin Drilling, which has submitted several bids in recent months.
SVP owns only three percent of Seadrill’s large bank debt, but has used all the funds it had as a creditor before the case in Texas. In recent months, the conflict between the parties has escalated, and Seadrill has branded SVP as “a hostile lender” trying to track down the rescue process.
“Untruths.” “Screaming legal shortcomings.” “A disgusting waste of resources.” This is how Seadrill’s lawyers have described their own creditor SVP, led by Victor Khosla.
SVP’s Dolphin – which is the company that arose after the bankruptcy of Fred. Olsen Energy in 2019 – has teamed up with the giant Transocean to place a bid on all Seadrills rigs. A third partner is also involved, and has previously been unknown. But DN has previously written that it is about the Egyptian rig company ADES.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We want you to share our cases using a link, which leads directly to our pages. Copying or other use of all or part of the content may only take place with written permission or as permitted by law. For additional terms look here.
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