Fredriksen Is Back in Rigs After $5 Billion Vanished in Seadrill
(Bloomberg) -- John Fredriksen's stake in Seadrill Ltd., once worth more than $5 billion, was virtually wiped out in the oil-market crash.
Now, the Norwegian-born shipping tycoon is placing a new wager on offshore drilling after overcoming a bondholder rebellion and pushing through the most complicated restructuring ever for the industry.
After more than two years of negotiations with banks, new investors, bondholders and shipyards on how to deal with the industry's biggest debt load, Seadrill emerged from bankruptcy protection this week. Fredriksen is investing about $300 million, raising his ownership to about 30 percent from 24 percent, according to a person familiar with the matter. That stake was already valued at about $630 million when U.S. markets closed on Thursday, and comes on top of more than $250 million he's placed in a new rig company, Northern Drilling Ltd., an investment that has almost doubled so far.
But the past couple of years have been long and painful for the 74-year-old billionaire, who's known as "Big Wolf" in the industry.
Financial Mess
Fredriksen founded the company in 2005 and together with his former top adviser, Tor Olav Troim, turned it into the biggest offshore driller by market value in less than a decade. But in the process, they amassed total obligations that topped $20 billion and set up a complex financial and corporate structure. Fredriksen even accused Troim, now a rig magnate in his own right, of leaving a financial mess behind when they parted ways in 2014.
Steering Seadrill back to life was a herculean task. The company named close to 90 debtor entities in its bankruptcy case, which involved more than 40 banks. More than 4,400 claims were recorded. The case was handled in a U.S. court in Texas, but spanned several countries. The most important documents had to be translated into Arabic, Norwegian, Portuguese, Spanish and Thai.
"It was one of the most complex restructurings in history, the largest ever in the offshore drilling sector," Scott Greissman, a partner at White & Case LLP, which represented a group of banks, said in an emailed statement.
An army of lawyers and financial advisers worked on the process, representing parties from Seadrill to several creditor committees. In an interview this week, Seadrill's Chief Executive Officer Anton Dibowitz declined to comment on the total cost of the restructuring, but acknowledged it had been "extremely long, arduous and expensive."
Fredriksen's participation was critical to the entire process, according to court documents and people involved.
He teamed up with hedge fund Centerbridge Partners LP in March 2017 and then added six other investors to commit to the $1.1 billion investment as part of the restructuring plan presented by Seadrill in September when it filed for Chapter 11. In return, they would get at least 70 percent of the restructured company. Fredriksen's investment company Hemen Holding Ltd. even got a 5 percent stake for its role as facilitator.
The banks were happy. But the company's bondholders less so.
Bondholder Revolt
About 60 percent of the unsecured lenders got only crumbs of the new capital investment, which was a juicy proposition if you believed in the rig market. A group of 37 bondholders and Barclays Plc staged a rebellion that culminated with two alternative plans in January, backed by about $200 million in deposits.
Some bondholders claimed they had been excluded from participating by a group of four of the initial investors -- Aristeia Capital L.L.C., GLG Partners LP, Saba Capital Management LP and Whitebox Advisors LLC. The bondholders have emails showing they contacted Moelis & Co., the group of four's adviser, before the Chapter 11 filing in September, according to four people familiar with the matter.
Moelis declined to comment when contacted by Bloomberg.
12
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- USA Driving Activity to Increase to All-Time Highs
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- I Squared Eyes Full Ownership of Europe Gas Storage Firm
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension