According to a Reuters article, Seadrill proposed a debt write-off of just over $4.8 billion. That would cut its debt by more than 86.5 per cent to $750 million.
The media outlet claimed that Seadrill has in the past year wrote off billions of dollars worth of assets due to a bleak outlook for the oil sector and warned in March it expected offshore drilling demand to remain depressed well into 2021.
In an annual report on 19 March, the company’s debt stood at $6.2 billion at the end of 2020, including $5.7 billion in secured credit facilities and $515 million in secured notes due 2025.
In the latest restructuring proposal, reported by Norwegian daily Finansavisen, Seadrill claimed it would emerge from bankruptcy by September with $750 million in total debt but only if the requested amount of debt was written off. The company would then also have $300 million in fresh capital.
Seadrill also proposed to raise $26 million by selling some of its rigs for scrap. The company claimed last year that it might scrap up to 10 assets within the fleet.
If the debt is written off, current shareholders would only hold a stake of just 1 per cent in the reorganized company.
Reuters added that Seadrill and its creditors were expected to update the U.S. bankruptcy court in Houston about their negotiations on 15 April.
The offshore driller, controlled by Norwegian-born billionaire John Fredriksen, filed for Chapter 11 bankruptcy protection back in February. That was the second time Seadrill applied for bankruptcy protection in four years.
