Seadrill seeks US$1bil new capital as talks prove challenging

SEADRILL Ltd., the offshore driller with the heaviest debt load, is seeking to raise at least US$1bil in new capital and is in talks with billionaire-owner John Fredriksen and new investors as negotiations prove more complex than anticipated.

The driller proposes raising at least US$1 billion in new capital, extending unsecured claims maturities out 2025 to 2028, pushing bank maturities out to 2021 to 2023, amending financial covenants and reducing fixed amortisation, Seadrill said in a statement on Tuesday.

“These negotiations have proved to be more complex than we had originally anticipated,” CEO Per Wullf said in the statement. 

“Nevertheless, key stakeholders have demonstrated a clear desire to be part of a solution and with the right structure and terms we believe there is significant capital available to us,” he said.

Seadrill, which had US$8.9 billion in net interest bearing debt at the end of the third quarter, and other offshore-rig operators have been hit hard by the collapse in crude prices over the past two years as oil companies slashed spending on services such as drilling. 

The pain has been compounded by a wave of new rigs, creating massive oversupply in the industry and decimating rental rates.

The London-based company is continuing talks with Fredriksen’s Hemen Holdings Ltd., banks, potential new money investors and an ad hoc committee of bondholders, it said. 

It aims to reach a deal on a consensual, comprehensive restructuring before April 30, when the West Eminence facility matures, with implementation during the second quarter. - Bloomberg