SDRL - Seadrill New Finance Limited Announces Extension of Forbearance Agreement

Rhea-AI Summary

On February 23, 2021, Seadrill Limited announced an extension of a forbearance agreement concerning its 12.0% senior secured notes due 2025. The agreement, initially revealed on February 11, allows certain noteholders to refrain from exercising enforcement rights regarding events of default, particularly following the company's filing for Chapter 11 bankruptcy in Texas. This extension is in place until March 10, 2021, and aims to provide time for a potential restructuring of the company's balance sheet.

Positive

• Extension of forbearance agreement allows time for negotiation and restructuring.
• Potential for comprehensive restructuring to stabilize financial position.

Negative

• Filing for Chapter 11 bankruptcy indicates severe financial distress.
• Non-payment of the semi-annual interest payment raises concerns about liquidity.

HAMILTON, Bermuda, Feb. 23, 2021 /PRNewswire/ -- Seadrill Limited ("Seadrill" or the "Company") (OSE:SDRL, OTCQX:SDRLF) announces that Seadrill New Finance Limited (the "Issuer"), a subsidiary of the Company, has agreed to extend the existing forbearance agreement announced on 11 February 2021 with respect to the 12.0% senior secured notes due 2025 (the "Notes") with certain holders of the Notes (the "Note Holders").

Pursuant to the forbearance agreement, as extended, the consenting Note Holders have agreed not to exercise any enforcement rights with respect to the Issuer and any subsidiary of the Issuer which is an obligor under the Notes to, or otherwise take actions in respect of, certain events of default that may arise under the Notes as a result of, amongst other things, the Issuer not making the semi-annual 4% cash interest payment due to the senior secured noteholders on 15 January 2021 in respect of their Notes and the filing of Chapter 11 cases in the Southern District of Texas by the Company and certain of its consolidated subsidiaries (excluding the Issuer and its consolidated subsidiaries) until and including the earlier of 10 March 2021 and any termination of the forbearance agreement.

The purpose of the forbearance agreement is to allow the Issuer and its stakeholders more time to negotiate on the heads of terms of a comprehensive restructuring of its balance sheet. Such a restructuring may involve the use of a court-supervised process.

FORWARD LOOKING STATEMENTS

This news release includes forward looking statements. Such statements are generally not historical in nature, and specifically include statements about the Company's plans, strategies, business prospects, changes and trends in its business, the markets in which it operates and its restructuring efforts. These statements are made based upon management's current plans, expectations, assumptions and beliefs concerning future events impacting the Company and therefore involve a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, which speak only as of the date of this news release. Consequently, no forward-looking statement can be guaranteed. When considering these forward-looking statements, you should keep in mind the risks described from time to time in the Company's regulatory filings and periodical reporting. The Company undertakes no obligation to update any forward looking statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for the Company to predict all of these factors. Further, the Company cannot assess the impact of each such factor on its business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward looking statement.

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

For further information, please contact:

Media questions should be directed to:

Iain Cracknell              

Director of Communications                 

+44 (0)7765 221 812

Analyst questions should be directed to:

Hawthorn Advisors       

seadrill@hawthornadvisors.com           

+44 (0)203 7454960

CONTACT:

seadrill@hawthornadvisors.com 

020 3745 4960

 

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SOURCE Seadrill Limited

FAQ

What is the latest news about Seadrill Limited (SDRLF)?

Seadrill Limited has extended a forbearance agreement concerning its senior secured notes due 2025 as of February 23, 2021.

What does the forbearance agreement mean for Seadrill's future?

The forbearance agreement allows Seadrill time to negotiate a potential restructuring of its balance sheet.

When is the deadline for Seadrill's forbearance agreement?

The forbearance agreement is extended until March 10, 2021.

Why did Seadrill file for Chapter 11 bankruptcy?

Seadrill filed for Chapter 11 to address significant financial challenges and seek a restructuring.

What issues has Seadrill encountered with its senior secured notes?

Seadrill faced events of default, notably not making a semi-annual interest payment due January 15, 2021.