The US South District of Texas Bankruptcy Court has approved Seadrill’s plans to exit bankruptcy proceedings.
This puts Seadrill on track to exit Chapter 11 in the fourth quarter of this year, the company said.
Seadrill will distribute a disclosure statement and then ask its lenders to support the plan. The court will hold a hearing on the plan on October 26.
“We are pleased with these developments, which put us firmly on the right track for the emergence of Chapter 11,” said Chief Financial Officer Grant Creed. “The Court approved our restructuring approval schedule and allowed us to solicit votes from the lenders. This will pave the way for significant deleveraging on the balance sheet. “
The company said its plan would allow it to restructure its balance sheet. It has already won the support of “the majority” of its major secured lenders.
The Texas court has postponed approval of the support commitment letter to a later hearing.
Seadrill filed for Chapter 11 in February of this year.
In July, the company announced a plan backed by 58% of its senior note holders and a security pledge with some of its lenders. It included a plan to raise $ 350 million in new financing and reduce Seadrill’s liabilities by more than $ 4.9 billion.
Lenders providing the new financing would receive 16.75% of Seadrill. Existing shareholders would receive 0.25% of the new equity. Senior secured lenders will have 83% of the new equity.
As the company worked on its reorganization plans, rumors circulated around potential bidders. Noble Corp. and a consortium of Transocean and Dolphin Drilling were appointed in July to express interest, in addition to a third limited company.
Seadrill’s bankruptcy filing did not include Seadrill New Finance, which owns stakes in SeaMex and Seabras Sapura.
Norwegian shipping magnate John Fredriksen is the largest shareholder in Seadrill, through Hemen Holdings. This unit will provide an unsecured bond of $ 50 million, convertible into a 5% interest.
Seadrill Partners went bankrupt in late 2020, emerging in May. It wiped out shareholders and $ 2.8 billion in debt. Independent management renamed the company under the name Aquadrill.