Seadrill Limited — Form 6-K Summary
Business context and reporting period
Seadrill Limited filed a Form 6-K for May 2021, dated May 27, 2021. The filing reports that Seadrill New Finance Limited, a subsidiary, extended a forbearance agreement relating to its 12.0% senior secured notes due 2025.
Seadrill describes itself as an offshore drilling contractor operating 43 rigs, including drillships, jack-ups and semi-submersibles, across shallow- to ultra-deep-water environments.
Financial position and key metrics
- The Issuer did not make the semi-annual 4% cash interest payment due January 15, 2021 on the senior secured notes.
- The filing identifies potential defaults under the notes arising from the missed interest payment and the Chapter 11 filings by Seadrill and certain consolidated subsidiaries.
- No revenue, profit, cash flow, margin, debt-balance, cash-balance or liquidity figures are provided in this filing.
Material changes versus the prior disclosure
The existing forbearance agreement, announced April 19, 2021 and previously extended May 17, 2021, was further extended. Consenting noteholders agreed not to exercise specified enforcement rights until the earlier of June 4, 2021, or termination of the agreement.
Outlook, restructuring and risks
The forbearance is intended to provide additional time for the Issuer and its stakeholders to negotiate heads of terms for a comprehensive balance-sheet restructuring. The restructuring may involve a court-supervised process.
The agreement does not eliminate the underlying payment default or other potential events of default. The filing warns that restructuring plans, business prospects and other forward-looking statements are subject to significant risks and uncertainties, and that actual outcomes may differ materially.
Facts investors should verify
- Whether the forbearance agreement was extended again, terminated or replaced after June 4, 2021.
- The status and terms of any comprehensive restructuring or court-supervised proceeding.
- The amount and treatment of unpaid interest under the 12.0% senior secured notes due 2025.
- Whether noteholders exercised enforcement rights or agreed to additional waivers.
- The effect of the Chapter 11 proceedings on Seadrill, the Issuer and their respective subsidiaries.