Seadrill Ltd., Hamilton, Bermuda, has filed prearranged Chapter 11 cases in the Southern District of Texas along with an agreed upon restructuring plan.
The company also filed first-day motions that will enable its day-to-day operations to continue as usual. Seadrill says it has more than $1 billion in cash and will not need debtor-in-possession financing.
The restructuring agreement involves more than 97% of its secured bank lenders, 40% of its bondholders, and a consortium of investors led by its largest shareholder, Hemen Holding Ltd.
The agreement provides Seadrill $1.06 billion of capital consisting of $860 million of secured notes and $200 million of equity. The company’s secured lending banks have agreed to defer maturities of all secured credit facilities, totaling $5.7 billion, by 5 years with no amortization payments until 2020 and significant covenant relief.
Also, assuming unsecured creditors support the plan, the company’s $2.3 billion of unsecured bonds and other unsecured claims will be converted into 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 2% of the post-restructured equity.
Seadrill says the restructuring plan was developed over the course of more than a year of discussions. The company has a fleet of 68 drilling units, including drillships, jack ups, semisubmersibles, and tender rigs for operations in shallow to ultradeepwater areas in both harsh and benign environments.