Seadrill Ltd’s $12.7 billion debt restructuring faces a critical phase as hold-out creditors prepare to challenge the plan put forward by John Fredriksen, its largest shareholder, as soon as a hearing next week, Reuters reported. The offshore drilling contractor, once the world’s largest by market capitalisation, filed for U.S. Chapter 11 bankruptcy protection in Texas on Sept. 12, presenting a plan backed by holders of 97 percent of its loans and 40 percent of its bonds. Norwegian-born shipping billionaire Fredriksen’s plan will extend by around five years maturities on billions of dollars in loans, giving the company breathing space until an industry recovery gains steam. The company will also raise $1.06 billion in new equity and debt financing from Fredriksen, through his family’s investment vehicle Hemen, investment firm Centerbridge Credit Partners LP and a group of hedge funds. Holders of unsecured claims were offered 14.3 percent of the stock after dilution in the reorganized Seadrill, and current shareholders will get 1.9 percent, but only if unsecured creditors accept the plan. Unsecured creditors can also receive a right to buy newly issued stock and debt if they vote for the plan.
