Seadrill Limited — Form 6-K Summary
Business context and reporting period
Seadrill Limited filed a Form 6-K for April 2021 regarding an announcement dated April 19, 2021. Its subsidiary, Seadrill New Finance Limited, issued 12.0% senior secured notes due 2025.
Material financial and restructuring developments
- The issuer replaced its existing forbearance agreement, which had been announced on February 11, 2021 and extended on February 23, March 9, and March 23, 2021.
- Consenting noteholders agreed not to exercise specified enforcement rights relating to certain potential events of default through the earlier of May 17, 2021 or termination of the new forbearance agreement.
- The potential defaults include failure to make the semi-annual 4% cash interest payment due January 15, 2021 on the notes.
- Additional potential defaults relate to Chapter 11 filings by Seadrill and certain consolidated subsidiaries in the Southern District of Texas. The issuer and its subsidiaries were excluded from those filings.
- The filing does not provide current revenue, profit, cash flow, margin, debt balance, cash, or liquidity amounts.
Outlook, risks, and contingencies
The forbearance is intended to provide additional time for the issuer and stakeholders to negotiate heads of terms for a comprehensive balance-sheet restructuring. The restructuring may involve a court-supervised process. No definitive restructuring terms or outcome were disclosed.
Seadrill cautioned that restructuring plans and other forward-looking statements are subject to substantial risks and uncertainties. Actual results may differ materially, and the company does not undertake to update the statements.
Key facts for investors to verify
- The exact holders and amount of notes covered by the new forbearance agreement.
- Whether the agreement remains in effect through May 17, 2021 or is terminated earlier.
- The status of negotiations and any subsequent restructuring support agreement or court-supervised filing.
- The amount and treatment of the unpaid January 15, 2021 interest payment.
- Potential effects on the issuer, guarantors, other Seadrill subsidiaries, and creditors if forbearance ends without a restructuring agreement.