Seadrill in bankruptcy to defer loan maturity, convert bonds to equity

By Caroline Salls

Pittsburgh, Sept. 12 – Seadrill Partners LLC’s largest shareholder, Seadrill Ltd., made a pre-arranged Chapter 11 bankruptcy filing Tuesday in the U.S. Bankruptcy Court for the Southern District of Texas to implement a restructuring agreement with secured lenders, bondholders and a consortium of investors, according to a Seadrill Partners news release.

Seadrill Partners said the restructuring agreement defers the maturity of secured bank debt by five years with no amortization payments until 2020, converts bonds to equity and delivers new capital to Seadrill.

As part of the Chapter 11 cases, the company said “first-day” motions were filed that will enable day-to-day operations to continue as usual, including the provision of management services to Seadrill Partners.

Seadrill Partners said its recently announced credit facility amendments successfully insulated it and its consolidated entities from events of default resulting from Seadrill Ltd.’s use of Chapter 11 proceedings to implement its restructuring plan.

No plan terms had been filed as of late Tuesday evening.

According to court documents, Seadrill had $21,666,000,000 in assets and $11,603,000,000 in debt as of Dec. 31, 2016.

The company’s largest unsecured creditor is Deutsche Bank Trust Co. Americas of New York, with $843 million, $479 million and $413 million unsecured bond debt claims.

In addition, Nordic Trust ASA of Oslo has a $210 million unsecured bond debt claim against the company, as well as two $165 million unsecured bond debt claims.

Daewoo Ship & Marine Engineering of Korea has a $909.5 million contract claim against Seadrill; Samsung Heavy Industries of Korea has a $728 million contract claim; and ABN Amro Bank NV, Singapore Branch has five guarantee claims related to a $780 million loan and two related to a $543 million loan.

The company is represented by Jackson Walker LLP.

Hamilton, Bermuda-based Seadrill Ltd. owns and operates offshore drilling rigs. The Chapter 11 case number is 17-60079.

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