Seadrill announces restructuring plan to raise $1bn capital

Seadrill announces restructuring plan to raise $1bn capital”

Existing shareholders won't be totally wiped out but will get 2% in the post-restructured company.

AOD is 33.76% owned by Mermaid Maritime and the remaining majority shares are owned by Seadrill.

Seadrill Limited filed for bankruptcy protection on Wednesday after the company's senior officials figured out a strategy to inject the company with $1 billion in new funds, according to a new report by Bloomberg.

Offshore drilling services provider Seadrill Ltd (OL:) said on Tuesday it had filed for Chapter 11 bankruptcy and entered into a restructuring agreement with bank lenders, bondholders and a consortium of investors.

"With our improved capital structure, we will be in a strong position to capitalize when the market recovers", said Anton Dibowitz, CEO and President of Seadrill Management Ltd. It has been one of many casualties of the downturn in oil prices, cutting several thousand jobs since 2014 as oil companies curtailed demand for rigs.

Furthermore, assuming unsecured creditors will support the plan, the company's $2.3bn of unsecured bonds and other unsecured claims will be converted into almost 15% of the post-restructured equity, with participation rights in both the new secured notes and equity.

"Mermaid Maritime wishes to announce that AOD and its subsidiaries have received, as part of Seadrill's restructuring agreement, the benefit of a temporary waiver and forbearance from default that may have arisen under AOD's bank credit facility agreement", Mermaid Maritime stated. So far, 40 percent of bondholders and 97 percent of the company's secured lenders support the plan.

"This is a testament to our position in the sector, having a large, modern fleet, a top-quality customer base and a proven operating track record", he added. While the company traded near $40.00 per share in 2014, it is now trading hands at $0.26 per share.

The filing in a Texas court is the latest step in a years-long process to restructure what was once the world's largest offshore driller by market capitalization and the crown jewel in the business empire of shipping tycoon Fredriksen. (NYSE:ATW), and Maersk Drilling, the offshore rig unit of A.P. Moller-Maersk Group, will either be sold or spun off in the next year.

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