Seadrill announced that it has emerged from chapter 11 after successfully completing its reorganization pursuant to its chapter 11 plan of reorganization. All conditions precedent to the restructuring contemplated by the Plan have been satisfied or otherwise waived.
The Plan has equitized approximately $2.4 billion in unsecured bond obligations, more than $1 billion in contingent newbuild obligations, substantial unliquidated guaranty obligations, and c. $250 million in unsecured interest rate and currency swap claims, while extending near term debt maturities, providing the Company with over $1 billion in fresh capital and leaving employee, customer, and ordinary trade claims largely unimpaired.
The Plan has re-profiled the Company’s debt and provided substantial liquidity that puts the Company in a strong position to execute its business plan. The figures presented below highlight key financial metrics as of the Effective Date:
- total cash of c.$2.1 billion;
- secured bank debt of c.$5.7 billion with the first maturity in 2022;
- new Secured Notes of c.$880 million maturing in 2025;
- backlog of c.$2.3 billion for Seadrill Limited, excluding Seamex and Seadrill Partners; and
- common shares issued of 100 million as described further below.
Issuance, Listing and Trading of New Common Stock
The Company has received approval to list its new common shares with the new CUSIP number G7998G 106 (the “New Common Shares“) on the New York Stock Exchange (the “NYSE“) under the same NYSE ticker symbol “SDRL” as the Company’s existing common shares (with the CUSIP G7945E 105) (the “Existing Shares“). Subject to the relevant approvals, the Company also intends to have its equity listed on the Oslo Stock Exchange (ISIN BMG7998G1069).
On the Effective Date, the Company will have approximately 100 million New Common Shares outstanding. The New Common Shares will be allocated as set forth below, in accordance with provisions of the Plan and issued on the Effective Date:
- 14.25% of the New Common Shares issued to holders of unsecured claims against the Company and certain of its chapter 11 debtor affiliates;
- 23.75% of the New Common Shares issued to participants in the $200 million equity investment under the Plan;
- 54.625% of the New Common Shares issued to participants in the $880 million new secured notes investment under the Plan;
- 1.9% of the New Common Shares issued to holders of existing common equity interest in the Company as of the Effective Date, an effective exchange ratio of approximately 0.0037345 New Common Shares per each Existing Share, and
- 5.475% of the New Common Shares issued as a structuring fee to certain of the new money investors.
Trading in approximately 16 million New Common Shares issued to existing shareholders and holders of unsecured claims will commence on the NYSE one day after the Effective Date, on July 3, 2018, under the ticker symbol “SDRL”. Additional shares may commence trading in the coming weeks after a resale registration statement on Form F-1 with respect to additional shares issued on the Effective Date to certain investors is declared effective by the Securities and Exchange Commission. The Existing Shares will continue to trade on both the NYSE and Oslo Stock Exchanges under the same ticker symbol through the close of trading on the Effective Date but thereafter such trading will be suspended and the shares will be cancelled in due course.
Because the Company will continue to use the ticker symbol SDRL, holders of Existing Shares, brokers, dealers and agents effecting trades in the Existing Shares, and persons who expect to receive New Common Shares or effect trades in New Common Shares, should take note of the anticipated cancellation of the Existing Shares and issuance of New Common Shares, and the two different CUSIP numbers signifying the Existing Shares and the New Common Shares, in trading or taking any other actions in respect of shares of the Company that trade under the “SDRL” ticker.
Any questions regarding these distributions should be directed to the Company’s claims and noticing agent, Prime Clerk, on the numbers provided below.
Fresh Start Reporting
From the Effective Date, the Company expects to adopt fresh-start reporting. Under fresh-start reporting, the Company’s assets and liabilities are re-measured using fair value accounting principles. Estimates of fair value adopted under fresh-start reporting represent the Company’s best current estimates based upon appraisals and valuations.
In accordance with our reporting obligations, the Company will issue its next earnings report in November 2018 which will include half year and third quarter 2018 results and reflect fresh start reporting.
New Board of Directors
In accordance with the Plan, a newly constituted Board of Directors of the Company was appointed today, consisting of John Fredriksen (chairman), Harald Thorstein, Kjell-Erik Østdahl, Scott D. Vogel, Peter J. Sharpe, Eugene I. Davis, and Birgitte Ringstad Vartdal.
John Fredriksen, Chairman of the Board, commented, “We are pleased to be emerging from chapter 11 and moving forward with a solid financial foundation on which we will continue to grow and strengthen our business.”
Anton Dibowitz, CEO of Seadrill Management, commented, “I would like to thank our customers, vendors and financial stakeholders for their continued loyalty and support throughout the restructuring process. I would also like to thank all our employees for their continued hard work and dedication during this period and whose efforts were a key part of concluding this restructuring process.”
The Company was principally advised by Kirkland & Ellis LLP, Slaughter and May, Advokatfirmaet Thommessen AS, Jackson Walker LLP, Houlihan Lokey Capital, Inc, Morgan Stanley and Alvarez & Marsal North America, LLP.