SDRL - Seadrill New Finance Limited Announces Extension of Forbearance Agreement

Rhea-AI Summary

Seadrill Limited (OTCQX: SDRLF) announced the extension of a forbearance agreement with holders of its 12.0% senior secured notes due 2025. This agreement, initially declared on April 19, 2021, allows for continued negotiation regarding a comprehensive restructuring of the company's balance sheet. It temporarily protects the Issuer from any enforcement actions related to defaults, including a missed 4% cash interest payment due on January 15, 2021. The arrangement aims to facilitate discussions on a possible court-supervised restructuring process.

Positive

• Forbearance agreement extension allows time for restructuring discussions.
• Protection from enforcement actions related to defaults enhances negotiation leverage.

Negative

• Missed semi-annual cash interest payment reflects financial distress.
• Potential for Chapter 11 restructuring indicates severe financial challenges.

HAMILTON, Bermuda, May 17, 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 19 April 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 28 May 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.

About Seadrill

Seadrill is a leading offshore drilling contractor utilizing advanced technology to unlock oil and gas resources for clients across harsh and benign locations across the globe. Seadrill's high quality, technologically advanced fleet spans all asset classes allowing its experienced crews to conduct its operations from shallow to ultra-deep-water environments. The company operates 43 rigs, which includes drillships, jack-ups and semi-submersibles.

Seadrill is listed on the Oslo Børs and OTCQX. For more information, visit https://www.seadrill.com/

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 to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

CONTACT:

seadrill@hawthornadvisors.com  

020 3745 4960

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FAQ

What is the latest news regarding Seadrill Limited's forbearance agreement?

Seadrill Limited has extended its forbearance agreement with senior secured noteholders to negotiate a comprehensive restructuring.

What financial obligation did Seadrill Limited miss leading to the forbearance agreement?

Seadrill Limited did not make the semi-annual 4% cash interest payment due on January 15, 2021.

What does the forbearance agreement allow Seadrill Limited to do?

The forbearance agreement allows Seadrill Limited additional time to negotiate restructuring terms without enforcement actions from noteholders.

When was the initial forbearance agreement announced by Seadrill Limited?

The initial forbearance agreement was announced on April 19, 2021.

What is the significance of the extension of the forbearance agreement for Seadrill Limited?

The extension is crucial for Seadrill Limited to explore restructuring options and stabilize its financial situation.