Seadrill says likely to file for bankruptcy

OSLO • Offshore drilling contractor Seadrill again delayed restructuring its US$14 billion (S$19 billion) in debt and liabilities yesterday, and reiterated that Chapter 11 bankruptcy was likely.

Once the biggest offshore rig company by market value and the crown jewel in the business empire of Norwegian billionaire John Fredriksen, Seadrill shares have fallen 99 per cent from a September 2013 peak.

The company's business has struggled as energy firms have slashed investment due to a more than 50 per cent fall in the price of crude oil since 2014.

"(Seadrill) has reached an agreement with its bank group to extend the comprehensive restructuring plan negotiating period until Sept 12," the company said in a statement, pushing back a previous July 31 deadline and the latest of several delays.

It is negotiating with more than 40 banks, including Norway's DNB, Sweden's Nordea and Denmark's Danske Bank, as well as bond holders and several rig-building yards.

In April, Seadrill warned its shares would lose almost all of their value and its bonds would be hit as it was preparing for potential bankruptcy proceedings.

"We continue to believe that implementation of a comprehensive restructuring plan will likely involve Chapter 11 proceedings," it said yesterday.

It said such a plan would require a substantial impairment or conversion of its bonds, impairments and losses for other stakeholders, while shareholders are likely to receive a minimal recovery for their shares.

The company has rigs under construction in Jurong in Singapore, Samsung and DSME shipyards in South Korea, and Dalian and Cosco in China.

REUTERS

A version of this article appeared in the print edition of The Straits Times on July 27, 2017, with the headline 'Seadrill says likely to file for bankruptcy'. Print Edition | Subscribe