SDRL - Seadrill New Finance Limited Announces Replacement of Forbearance Agreement

Rhea-AI Summary

Seadrill Limited, a leader in the offshore drilling sector, announced a new forbearance agreement on April 19, 2021, replacing an earlier agreement from February. The new arrangement pertains to the 12.0% senior secured notes due in 2025, allowing stakeholders more time to negotiate a comprehensive balance sheet restructuring. Notably, this follows the non-payment of a semi-annual interest due on January 15, 2021, amid ongoing Chapter 11 proceedings in Texas. The forbearance will remain effective until May 17, 2021, unless terminated earlier.

Positive

• New forbearance agreement allows negotiation for restructuring.
• Extension provides time to avoid enforcement actions by Note Holders.

Negative

• Company failed to make a semi-annual cash interest payment due January 15, 2021.
• Ongoing Chapter 11 proceedings may indicate financial instability.

HAMILTON, Bermuda, April 19, 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 replace the existing forbearance agreement announced on 11 February 2021, and extended on 23 February 2021, 9 March 2021 and 23 March 2021 with a new forbearance agreement, 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 new forbearance agreement, 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 17 May 2021 and any termination of the forbearance agreement.

The purpose of the new 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.

CONTACT:
seadrill@hawthornadvisors.com 
020 3745 4960

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SOURCE Seadrill Limited

FAQ

What is the latest forbearance agreement for Seadrill Limited?

Seadrill Limited announced a new forbearance agreement on April 19, 2021, to replace an earlier agreement regarding 12.0% senior secured notes due 2025.

What are the implications of Seadrill's new forbearance agreement?

The new forbearance agreement allows the Issuer and stakeholders more time to negotiate a comprehensive restructuring of the balance sheet.

When does Seadrill's new forbearance agreement expire?

The new forbearance agreement is effective until May 17, 2021, unless terminated earlier.

What financial challenges is Seadrill facing?

Seadrill has not made a semi-annual 4% cash interest payment due on January 15, 2021, and is undergoing Chapter 11 bankruptcy proceedings.

What is the significance of the new forbearance agreement for SDRLF?

The agreement signifies a critical step in managing the company's financial obligations, potentially affecting shareholder interests and future operations.