Offshore drilling contractor Seadrill has entered into an settlement with a few of its lenders for the suspension of debt funds whereas the corporate is engaged on restructuring its debt.

West Linus rig
West Linus rig; Source: Seadrill

Since the tip of 2019, Seadrill has been working with its senior collectors to offer an interim resolution to the excessive money outflow for debt service previous to endeavor a extra complete restructuring.

In an replace on Tuesday, Seadrill stated it has entered into forbearance agreements with sure collectors in respect of the group’s senior secured credit score facility agreements, senior secured notes, and assure facility settlement.

Under the forbearance agreements, the consenting collectors have agreed to not train any voting rights to, or in any other case take actions, in respect of sure occasions of default that will come up underneath the senior secured credit score facility agreements, senior notes and assure facility settlement because of the group not ensuring curiosity funds falling due in September 2020 underneath the group’s senior secured credit score agreements till and together with the sooner of 29 September 2020 and any termination of the forbearance agreements.

Seadrill famous that forbearance has not but been agreed with respect to termination occasions that will come up underneath the corporate’s leasing agreements in respect of the West Hercules, West Linus, and West Taurus rigs.

Without a forbearance in respect of those leasing agreements, a non-payment of curiosity underneath the agreements lined by the forbearance agreements which have been agreed may lead to enforcement of a cross-default underneath such leasing agreements.

The goal of the forbearance agreements is to permit the corporate and its stakeholders extra time to barter on the top phrases of a complete restructuring of its steadiness sheet. Such restructuring could contain using a court-supervised course of.

The firm added it continues to judge capital construction proposals from its monetary stakeholders; while no settlement has been reached at this level it’s anticipated that potential options will result in vital equitization of debt which is more likely to lead to minimal or no restoration for present shareholders.

It can also be value reminding that Seadrill in June stated it was an applicable time to rationalize its itemizing preparations. As a consequence, Seadrill moved to delist from NYSE and focus upon the Oslo Stock Exchange going ahead.

In latest firm information, Seadrill determined to purchase out Mermaid Maritime from the offshore drilling three way partnership Asia Offshore Drilling (AOD) for a worth of $31 million. AOD owns and operates three jack-up drilling rigs.

The put up Seadrill agrees debt cost suspension with collectors appeared first on Offshore Energy.

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