Business Context and Reporting Period
Seadrill Limited filed this Form 6-K on October 12, 2021, reporting voting results for its Chapter 11 Plan of Reorganization announced October 11, 2021. Seadrill is an offshore drilling contractor operating a fleet of 42 rigs, including drillships, jack-ups, and semi-submersibles.
Key Financial and Capital Structure Information
The filing does not provide revenue, profit, cash flow, margin, cash balance, or liquidity metrics. It identifies the company’s significant creditor classes and states that existing shareholders are contemplated to receive only 0.25% of the new equity, subject to dilution, upon emergence from Chapter 11.
| Plan class | Claims or interests | Percentage accepting |
|---|---|---|
| 4A | AOD Credit Agreement Claims | 100% |
| 4B | $450 million Eminence Credit Agreement Claims | 100% |
| 4C | NADL Credit Agreement Claims | 86.89% |
| 4D | $1.35 billion Credit Agreement Claims | 93.70% |
| 4E | $950 million Credit Agreement Claims | 100% |
| 4F | ECA Credit Agreement Claims | 100% |
| 4G | $1.5 billion Credit Agreement Claims | 100% |
| 4H | $1.75 billion Credit Agreement Claims | 71.81% |
| 4I | $450 million Nordea Credit Agreement Claims | 100% |
| 4J | $300 million Credit Agreement Claims | 100% |
| 4K | $440 million Credit Agreement Claims | 100% |
| 4L | $400 million Credit Agreement Claims | 100% |
| 6 | General Unsecured Claims | 91.68% |
| 9 | Existing equity interests | 85.72% |
Material Changes Versus the Prior Comparable Period
The filing is a restructuring update rather than a periodic financial report and does not present comparative operating or financial results. The material change is the overwhelming acceptance of the reorganization plan by all voting creditor and shareholder classes.
- More than 96% of secured lenders voted.
- More than 88% of secured lenders accepted the Plan.
- All 12 credit facilities and general unsecured creditors accepted the Plan.
- Shareholder approval was 85.72% of shares voting, with existing shareholders’ post-emergence recovery limited to 0.25% of new equity, subject to dilution.
Guidance, Outlook, Risks, Contingencies, and Unusual Items
Seadrill was scheduled to seek confirmation of the Plan from the U.S. Bankruptcy Court for the Southern District of Texas on October 26, 2021. If confirmed, the company targeted exiting Chapter 11 approximately 60 days later, subject to customary conditions, including certain antitrust approvals.
The voting results remained subject to review by Prime Clerk, the balloting agent, and could change. Prime Clerk was expected to file a final certification report with the court by October 22, 2021.
Management stated that emergence from Chapter 11 would position Seadrill to participate in an offshore drilling sector undergoing significant readjustment. These expectations are forward-looking and subject to risks, uncertainties, assumptions, court approval, regulatory approvals, and other conditions. The filing does not guarantee that the Plan would be confirmed or that the targeted emergence timing would be achieved.
Important Facts for Investors to Verify
- Whether the bankruptcy court confirmed the Plan at or after the scheduled October 26, 2021 hearing.
- Whether Prime Clerk’s final voting report changed the reported acceptance percentages.
- Whether all required antitrust and other customary approvals were obtained.
- The final ownership and dilution structure upon emergence, including the treatment of existing shareholders’ 0.25% recovery.
- Seadrill’s post-emergence debt, liquidity, fleet utilization, backlog, and operating performance, which are not provided in this filing.