Rig Firm Seadrill Says $8B Debt Talks 'Complex', Expects 2Q Deal

Reuters

OSLO, Jan 31 (Reuters) - Rig firm Seadrill, once the crown jewel in the business empire of shipping tycoon John Fredriksen, says talks to restructure its $8 billion debt have taken longer than expected, but it is aiming for a deal in the second quarter.

Once the top offshore driller by market capitalisation ahead of Transocean, Seadrill's market value plunged 90 percent in the past three years, hit by a halving of crude prices since mid-2014 that has cut demand from oil firms.

The Norwegian firm has been working for months to restructure its debts and has had to postpone a conclusion several times.

"These negotiations have proved to be more complex than we had originally anticipated," Seadrill CEO Per Wulff said in a statement.

"Nevertheless, key stakeholders have demonstrated a clear desire to be part of a solution and with the right structure and terms we believe there is significant capital available to us," he said.

Hemen Holding, one of Fredriksen's investment vehicles, is the top shareholder in Seadrill with a stake of 23.61 percent.

Seadrill now plans to raise at least $1 billion in new capital; extend bank maturities to the period from 2021 to 2023, reduce fixed amortisation and amend financial covenants; and extend the maturity of unsecured claims to mature in the period from 2025 to 2028.

Seadrill now aims to reach a "consensual, comprehensive" restructuring before the maturing of a bond on the West Eminence rig on April 30 and if it does, the plan would be implemented during the second quarter.

Still, Seadrill said that while talks are continuing, it had not yet reached an agreement with all parties involved.

"We expect that any comprehensive agreement that would be based on raising significant new capital is likely to result in significant dilution to current shareholders and potential losses for other financial stakeholders," said Seadrill.

(Reporting by Gwladys Fouche; Editing by Richard Pullin and Louies Heavens)

Copyright 2017 Thomson Reuters. Click for Restrictions.

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