Seadrill warns again of Chapter 11 as extends $14 bln debt talks (updated)

COSCO Shipping International (SINGAPORE)

26/07/2017 10:34

(Adds details, share, credit analyst) 
    By Ole Petter Skonnord 
    OSLO, July 26 (Reuters) - Offshore drilling contractor 
Seadrill  SDRL.OL  again delayed restructuring its $14 billion 
in debt and liabilities on Wednesday and reiterated that Chapter 
11 bankruptcy was likely. 
    Once the biggest offshore rig firm by market value and the 
crown jewel in the business empire of Norwegian billionaire John 
Fredriksen, Seadrill shares have fallen 99 percent from a 
September 2013 peak. 
    The company's business has struggled as energy firms have 
slashed investment due to a more than 50 percent fall in the 
price of crude oil since 2014. 
    "(Seadrill) has reached an agreement with its bank group to 
extend the comprehensive restructuring plan negotiating period 
until Sept. 12," the firm said in a statement, pushing back a 
previous July 31 deadline and the latest of several delays.  
    The company is negotiating with more than 40 banks, 
including Norway's DNB  DNB.OL , Sweden's Nordea  NDA.ST  and 
Denmark's Danske Bank  DANSKE.CO , as well as with bondholders 
and several rig-building yards.  
    In April, Seadrill warned its shares would lose almost all 
of their value and its bonds would be hit as it was preparing 
for potential bankruptcy proceedings. 
    "We continue to believe that implementation of a 
comprehensive restructuring plan will likely involve Chapter 11 
proceedings," it said on Wednesday. 
    The company said such a plan would require a substantial 
impairment or conversion of its bonds, impairments and losses 
for other stakeholders, including shipyards, while shareholders 
are likely to receive a minimal recovery for their shares. 
    Seadrill's shares were up 2.5 percent at 0738 GMT, against 
an Oslo benchmark index  .OSEBX  up 0.8 percent, on signs that 
the talks to resolve the situation were ongoing.  
    But the outcome of talks remains uncertain and the latest 
delay shows the complexity of finding a solution with so many 
parties involved, Erling Tveit, a Fearnleys credit analyst, 
said. 
    "It shows that the process takes a long time," Tveit said. 
    Seadrill shares, which reached an all-time high of 289 
crowns in 2013, were trading at 3.67 crowns at 0738 GMT. 
    The company has rigs under construction at Samsung 
 010140.KS  and DSME  042660.KS  shipyards in South Korea, 
Jurong in Singapore, and Dalian and COSCO  COSC.SI  in China.  
($1 = 8.0034 Norwegian crowns) 
 
 (Additional reporting by Gwladys Fouche in Oslo; editing by 
Jason Neely and Alexander Smith) 
 ((gwladys.fouche@tr.com; +47 23 31 65 94; Reuters Messaging: 
gwladys.fouche.reuters.com@reuters.net; Twitter handle: 
@gfouche)) 
 
Keywords: SEADRILL DEBT/