Seadrill Reorganization Plan Approved, Bankruptcy Exit On Horizon
Offshore drilling contractor Seadrill has been given confirmation for its reorganization plan from the U.S. Bankruptcy Court for the Southern District of Texas and is now on track to exit bankruptcy.
Seadrill said that the plan of reorganization was confirmed by the court and that it is targeting an exit from Chapter 11 in around 60 days, subject to certain customary conditions and antitrust approvals.
“Confirmation of the plan by the Court is a watershed moment for Seadrill and one we should celebrate as we move into the final stages to emerge from Chapter 11,” Stuart Jackson, Seadrill CEO, said.
“Achieving this milestone would not be possible without the collective efforts of our employees, customers, partners, suppliers, creditors, and shareholders. The continued support from this broad Seadrill community is one of our greatest assets and will be critical to the success of our next chapter as we reinforce our position as a market leader,” Jackson added.
Seadrill stated that the plan raises $350 million in new financing and reduces the firm’s existing liabilities by $4.9 billion. It also leaves employee, customer, and trade claims unaffected, while existing shareholders will see their holding in the post-emergence entity decrease to 0.25 percent.
“With emergence around the end of the year, we stand alongside our offshore drilling peers focused on safe and efficient delivery to our customers in an industry that continues to need to evolve. Seadrill’s strong brand will ensure we maintain a leadership position in future developments,” Jackson concluded.
To put things into context, Seadrill filed for Chapter 11 in February 2021, which was the second time the company has done that in four years. Since then, Seadrill agreed on a reorganization plan with its lenders in July, and the court approved the disclosure statement for the company’s proposed plan of reorganization last month.
Seadrill’s reorganization plan was also overwhelmingly accepted by all classes of voting creditors and shareholders earlier in October.
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