Offshore drilling contractor Seadrill has earned a welcome boost for its financial restructuring plans, with an overwhelming number of its shareholders and voting creditors giving their approval.
Seadrill is seeking to restructure more than $7 billion of debt in exchange for handing control of the company to its creditors.
It operates 43 drilling rigs, including 10 managed on behalf of other players such as Northern Ocean and Aquadrill Offshore.
“The near-unanimous acceptance of the plan by our lenders is another important step towards Seadrill’s emergence from chapter 11,” said the rig contractor’s chief financial officer Grant Creed.
“This has been a long journey to deliver broad support across our creditor constituency, but I am confident that our eventual emergence will place us back at the heart of a sector collectively going through significant readjustment and reinforce our position as a market leader.”
All voting classes of stakeholders accepted Seadrill’s plan of organisation, including all 12 credit facilities and general unsecured creditors and shareholders.
More than 96% of secured lenders voted, and over 88% of secured lenders accepted the plan.
Based on these results, Seadrill is on track to have its plan confirmed at the confirmation hearing scheduled for 26 October.
If the court confirms the plan on that date, Seadrill is targeting to exit Chapter 11 proceedings around two months later, subject to certain customary conditions, including certain antitrust approvals.
The deadline for creditors to submit votes on the plan was 7 October.
The results are now subject to ongoing review by Prime Clerk, Seadrill’s balloting agent, and remain subject to change.
Prime Clerk will by 22 October file a report certifying the final voting results to the United States Bankruptcy Court for the Southern District of Texas (the court).
Seadrill on Monday also confirmed that Mexico’s state-owned Pemex late last month stumped up US$31.4 million to settle a backlog of unpaid invoices.
The payments were made to certain subsidiaries of SeaMex, which is in provisional liquidation, a 50:50 joint venture entered into by subsidiary Seadrill JU Newco Bermuda.
This payment to SeaMex has no bearing on Seadrill’s ongoing plan of reorganisation and therefore does not impact the recoveries the company’s existing shareholders will receive.
Meanwhile, Seadrill reminded its shareholders that, under the reorganisation plan, their holding in the post-emergence entity will drop to 0.25%.
A successful restructuring may fend off bids from rivals.
A consortium of Transocean, Dolphin and an unidentified party reportedly lodged a bid to acquire Seadrill's assets in July.
Meanwhile, Noble Drilling — which itself only came out of bankruptcy protection earlier this year — had tabled an earlier bid for Seadrill's assets back in May.