April 4, 2017 / 5:51 AM / 2 years ago

Seadrill says shares to have little value after restructuring

OSLO, April 4 (Reuters) - The current shareholders of Seadrill should expect to lose almost all value of their stock as the company prepares for potential bankruptcy proceedings to restructure debt and liabilities of $14 billion, the rig firm said on Tuesday.

It also said that its banks and other lenders had agreed to extend ongoing restructuring talks by three months to July 31.

“We currently believe that a comprehensive restructuring plan will require a substantial impairment or conversion of our bonds, as well as impairment, losses or substantial dilution for other stakeholders,” Seadrill said in a statement.

“As a result, the company currently expects that shareholders are likely to receive minimal recovery for their existing shares ... We expect the implementation of a comprehensive restructuring plan will likely involve schemes of arrangement or chapter 11 proceedings, and we are preparing accordingly,” it added.

Once the crown jewel in the empire of shipping tycoon John Fredriksen, Oslo-listed Seadrill’s shares have fallen 95 percent in the past three years as plunging crude prices and drastic spending cuts by oil companies hammered rig rates. (Reporting by Terje Solsvik and Ole Petter Skonnord; Editing by Himani Sarkar)

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