Seadrill Proposes Debt Write-Off in Bankruptcy Court – Report

SEADRILL 3 oil rig is seen during its christening ceremony in Singapore...The SEADRILL 3, the first of four oil rigs that Keppel FELS is building for the same customer, is seen during its christening ceremony in Singapore April 21, 2006. Upon its delivery in May 2006, SEADRILL 3 will be deployed to TOTAL in Nigeria for two years. It will be capable of operating in 350 feet water depth, drilling down to 30,000 feet and accommodating 110 men. REUTERS/Luis Enrique Ascui

Seadrill Ltd., owned by billionaire John Fredriksen, is proposing a debt write-off of just over $4.8 billion, according to Finansavisen.

The proposal, sent to the U.S. bankruptcy court in Texas ahead of the Easter holidays, would let Seadrill’s lenders take over 99% of the company and leave current shareholders with the remaining 1%, the paper said.

According to Finansavisen, the proposed write-off will help Seadrill cut its debt by more than 86.5% to $750 million.

As part of the deal, Seadrill is also suggesting an injection of new capital of $300 million. Lenders shall have a preferential right to subscribe for the entire amount, Seadrill’s chairman Glen Ole Rødland told the newspaper.

[bloomberg]

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