Seadrill unit files for bankruptcy within 24 hours

The SEADRILL 3. REUTERS / Luis Enrique Ascui / Files

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  • Restructuring involves Mexican platforms
  • Noteholders take control of the Seadrill unit

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(Reuters) – A unit of offshore driller Seadrill Ltd filed a fast-track reorganization plan in Houston bankruptcy court on Tuesday, where it hopes to seek approval of the proposal on Wednesday.

The case comes just months after its parent entity emerged from its own bankruptcy proceedings. This reorganization plan is expected to come into effect early this year. According to a statement by Financial Controller Tyson de Souza, the Chapter 11 affair of Seadrill New Finance Ltd is supposed to be the “end piece” of the overall restructuring efforts of the Seadrill Group.

De Souza said there was no objection to the plan and that “there is no doubt that it is in the best interests” of the company, which is represented by Kirkland & Ellis.

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A representative from Seadrill Ltd did not immediately respond to a request for comment.

Seadrill New Finance, which has approximately $ 535 million in secured debt, does not operate on its own. It serves as a holding company for a joint venture with an investment fund controlled by Fintech Holdings Ltd. The joint venture, SeaMex Ltd, owns five rigs in Mexico and underwent restructuring last year after state oil company Pemex, a major customer, failed to pay.

Under the proposed plan, holders of secured notes will repossess most of the shares of Seadrill New Finance. The company, which says it has lined up the votes it needs from creditors, will ask U.S. bankruptcy judge David Jones to approve the plan on Wednesday afternoon.

Seadrill Ltd went bankrupt in 2018, emerging with billions of dollars in lost debt and $ 1 billion in new investments. He returned to Chapter 11 in 2021, blaming the sustained downturn in the oil and gas market and the economic impact of the COVID-19 pandemic.

Jones signed Seadrill Ltd’s latest restructuring plan in October, which aimed to reduce the company’s $ 5.6 billion debt by $ 4.9 billion.

Although unusual, one-day cases in Chapter 11 have appeared occasionally in recent years. Kirkland, who also represented the parent entity in its Chapter 11 cases, has previously guided companies through these types of quick restructurings in court.

The case is In re Seadrill New Finance Ltd, United States Bankruptcy Court, Southern District of Texas, 22-9001.

For Seadrill New Finance: Anup Sathy, Ross Kwasteniet, Spencer Winters, Christopher Marcus and Jaimie Fedell of Kirkland & Ellis; and Matthew Cavenaugh, Jennifer Wertz, Vienna Anaya and Victoria Argeroplos of Jackson Walker

Read more:

Mexican Ministry of Finance Completes Refinancing of Pemex Short-Term Debt

Seadrill lenders agree to extend cash usage, for now

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