Seadrill Limited — Form 6-K Summary
Filing date: June 24, 2021. Reporting period: June 2021. This filing reports an extension of a forbearance agreement by Seadrill New Finance Limited, a Seadrill subsidiary.
Business Context and Key Event
- Seadrill is an offshore drilling contractor operating drillships, jack-ups, and semi-submersibles across shallow- to ultra-deep-water markets.
- The company reported operating 43 rigs and is listed on the Oslo Børs and OTC Pink markets.
- Seadrill New Finance Limited extended its existing forbearance agreement with certain holders of its 12.0% senior secured notes due 2025.
Financial Position and Metrics
The filing does not provide revenue, profit, cash flow, margin, debt-balance, liquidity, or other quantitative financial metrics beyond identifying the 12.0% senior secured notes and a missed semi-annual 4% cash interest payment due January 15, 2021.
- The missed interest payment relates to the senior secured notes.
- The filing indicates significant financial distress, including Chapter 11 filings by Seadrill and certain consolidated subsidiaries.
Material Changes and Restructuring
- The forbearance agreement was previously extended on April 19, May 17, May 27, June 3, and June 18, 2021, and was further extended on June 24, 2021.
- Consenting noteholders agreed not to exercise specified enforcement rights or take related actions concerning certain events of default.
- The forbearance applies through the earlier of July 2, 2021, or termination of the agreement.
- The agreement is intended to provide additional time to negotiate heads of terms for a comprehensive balance-sheet restructuring, which may involve a court-supervised process.
Outlook, Risks, and Unusual Items
- The company’s restructuring remains subject to negotiation and may proceed through a court-supervised process; no final restructuring terms are provided.
- Events of default may arise from the missed interest payment and the Chapter 11 filings by the company and certain subsidiaries, excluding the issuer and its consolidated subsidiaries.
- Enforcement protections apply only to consenting noteholders and only during the specified forbearance period, subject to earlier termination.
- Management’s forward-looking statements regarding restructuring and business prospects are subject to substantial risks and uncertainties, and the company undertakes no obligation to update them.
Investor Verification Checklist
- Verify whether the forbearance agreement was extended beyond July 2, 2021 or terminated earlier.
- Confirm the final terms and implementation status of any balance-sheet restructuring or court-supervised process.
- Assess the status of the missed January 15, 2021 interest payment and any resulting defaults or enforcement actions.
- Review the scope of the Chapter 11 proceedings and the treatment of the issuer, its subsidiaries, and the 2025 noteholders.
- Obtain current debt, liquidity, cash-flow, and operating-performance information from subsequent filings.