Business Context and Reporting Period
Seadrill Limited filed Form 6-K for June 2021, dated June 4, 2021. The filing reports an update concerning Seadrill New Finance Limited, a subsidiary and issuer of 12.0% senior secured notes due 2025.
Key Financial Metrics and Liquidity
The filing is limited to a restructuring and debt-forbearance announcement. It does not provide current revenue, profit, cash flow, margin, balance-sheet, liquidity, or debt-balance figures.
- The Issuer did not make the semi-annual 4% cash interest payment due January 15, 2021 on the senior secured notes.
- The filing does not state the amount of unpaid interest or the Company’s available cash and liquidity.
- Seadrill states that it operates 43 rigs, including drillships, jack-ups, and semi-submersibles.
Material Changes Versus the Prior Comparable Period
Seadrill New Finance Limited agreed to further extend an existing forbearance agreement previously announced on April 19, May 17, and May 27, 2021. Consenting noteholders agreed not to exercise specified enforcement rights through the earlier of June 18, 2021, or termination of the agreement.
The forbearance covers potential events of default arising, among other matters, from the missed January 15, 2021 interest payment and the Chapter 11 filings by Seadrill and certain consolidated subsidiaries, excluding the Issuer and its subsidiaries.
Guidance, Outlook, Risks, and Unusual Items
- The purpose of the forbearance is to provide additional time to negotiate heads of terms for a comprehensive balance-sheet restructuring.
- The restructuring may involve a court-supervised process.
- Seadrill and certain subsidiaries have filed Chapter 11 cases in the U.S. Bankruptcy Court for the Southern District of Texas.
- The forbearance does not eliminate the underlying defaults or debt obligations; it temporarily restricts enforcement actions by consenting noteholders.
- The outcome and timing of the restructuring remain uncertain, and the filing warns that forward-looking statements are subject to substantial risks and uncertainties.
Important Facts for Investors to Verify
- Whether the forbearance agreement was extended beyond June 18, 2021 or terminated earlier.
- The final terms, scope, and implementation timetable of any comprehensive balance-sheet restructuring.
- The amount and treatment of unpaid interest and other obligations under the 2025 notes.
- The status and outcome of Seadrill’s Chapter 11 proceedings.
- Seadrill’s current cash position, liquidity sources, debt balances, and operating performance, which are not provided in this filing.