Featured Company News – North Atlantic Drilling Reveals Comprehensive Restructuring Plan as Part of Chapter II Proceedings

LONDON, UK / ACCESSWIRE / September 15, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Seadrill Ltd (NYSE: SDRL), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=SDRL. North Atlantic Drilling Ltd (NASDAQ: NADL) (“NADL”) which is a majority owned subsidiary of Seadrill has revealed a Comprehensive Restructuring Plan as a part of the Company’s filings in the Southern District of Texas with the pre arranged chapter 11 cases. Both NADL and Seadrill along with the Company’s subsidiaries (Group) have filed for Chapter 11 bankruptcy and have entered into agreements with the banks, investors, and bondholders. For immediate access to our complimentary reports, including today’s coverage, register for free now at:

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Sharing his views on the restructuring plan, Anton Dibowitz, CEO and President of Seadrill Management, said:

“The restructuring agreement we signed today is a comprehensive plan that raises over $1 billion of new capital, is underpinned by Hemen Holding Ltd, our largest shareholder, and is overwhelmingly supported by our banks and approximately 40 percent of our bondholders. This is a testament to our position in the sector, having a large, modern fleet, a top-quality customer base and a proven operating track record. With our improved capital structure, we will be in a strong position to capitalize when the market recovers.”

The Restructuring Agreement

Both Companies revealed that the restructuring agreement covers more than 97% of the Group’s secured bank lenders, 40% of the Group’s bondholders, and a consortium of investors which includes Seadrill’s majority shareholder, Hemen Holding Ltd. The agreement would see the payment of $1.06 billion by Seadrill which includes $860 million in secured notes and $200 million in equity. The Group’s lending banks have agreed to defer the maturity dates of secured credit facilities valued over $5.7 billion for five years. During this period, there will be no amortization payments until 2020, giving the Group a major relief.

The Group has an additional $2.3 billion of unsecured bonds and other unsecured claims and plans to convert these into approximately 15% of the post-restructured equity with participation rights in both the new secured notes and equity. This would be possible only with the support of the unsecured creditors. The above arrangement takes care of the Group’s total liabilities in terms of secured, unsecured, and other debt.

The restructuring plan has provisions for holders of Seadrill’s common stock, who will receive approximately 2% of the post-restructured equity. However, the plan does not make any provision for recovery for the shareholders of NADL.

The Group revealed that the restructuring plan took over a year to be formulated and was a result of detailed discussions. The key element of the plan is that NADL and Seadrill will be able to continue routine operations. The restructuring plan envisions that the Company is free of any debt payments for five years and at the end of this term, the Group will have a strong cash flow and liquidity. This would enable it to take advantage of opportunities when the market recovers.

NADL and Seadrill have filed for chapter 11 bankruptcy protection in the Southern District of Texas along with the agreed restructuring plan. The Company has filed a motion on the first day, which if agreed by the Court would allow it to continue with its day-to-day operations. The Company has also requested the concerned authorities to expedite the payments to key trade creditors, wages and benefits to employees on priority and without any change or interruption. It also expects that all the suppliers and vendors who will provide goods and services during the chapter 11 proceedings, would be paid in full under normal terms.

At the time of filing the cases, it is estimated that the Group has over $1 billion as cash in hand and would not require debtor-in-possession financing. The restructuring agreement will allow the Company to clean up its balance sheet and will not affect the Company’s operations.

About Seadrill and North Atlantic Drilling

Hamilton, Bermuda headquartered Seadrill is a deepwater drilling contractor which provides drilling services to the oil and gas sector. It has a fleet of over 68 rigs comprises drill ships, jack-up, semi-submersibles, and tender rigs for operations in shallow to ultra-deepwater areas in both harsh and benign environments. The Company has five regional offices across the globe including Oslo, Dubai, Houston, Rio de Janeiro, and Ciudad del Carmen. The Company has been facing rough waters due to the price drop in the petroleum industry in the last few years. The Company has had to lay off several thousand employees since 2014 and has been in continuous negotiations with its creditors to restructure its debts.

Seadrill owns a majority interest of 70.4% in its subsidiary NADL. NADL is a leading offshore harsh environment drilling company and has a fleet of eight harsh environment units in operation and one new build under construction.

NADL has been heavily dependent on Seadrill to keep itself financially afloat. In the last one-year Seadrill has been providing increasing and periodic interim funding to NADL since January 2017. Just a few days prior to filing the chapter 11, on September 08, 2017, Seadrill had increased the capacity of the revolving credit facility to NADL from $150 million to $200 million.

Last Close Stock Review

At the close of trading session on Thursday, September 14, 2017, Seadrill’s stock price declined 8.18% to end the day at $0.25. A total volume of 24.20 million shares were exchanged during the session, which was above the 3-month average volume of 8.43 million shares. At Thursday’s closing price, the stock’s net capitalization stands at $127.77 million.

On Tuesday, September 12, 2017, North Atlantic Drilling’s stock closed the trading session flat at $1.12, with an average volume of 241.27 thousand shares. The stock currently has a market cap of $27.01 million.

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