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Seadrill's unsecured creditors say looking at pre-bankruptcy deals
October 10, 2017 / 8:51 PM / 13 days ago

Seadrill's unsecured creditors say looking at pre-bankruptcy deals

CHICAGO (Reuters) - Seadrill Ltd’s (SDRL.OL) official committee of unsecured creditors said it has hired an investment banker and is looking into transactions made by the global offshore drilling contractor before it filed for U.S. Chapter 11 bankruptcy protection in Texas last month.

“We are looking at numerous pre-petition transactions that were described at least in part” in Chapter 11 filings by Seadrill on Sept. 12, the committee’s lawyer, Douglas Mannal, of Kramer Levin Naftalis & Frankel LLP said at a hearing in Houston on Tuesday.

“There are unique facts and circumstance in this case and we’ll discuss them more at an appropriate time,” Mannal said.

Seadrill could not be reached for comment.

While it was unclear which transactions the committee was studying, Seadrill made some amendments to secured credit facilities before filing for creditor protection.

In one instance, Seadrill said on Aug. 17 it had amended three secured credit facilities related to rigs purchased by New York-listed Seadrill Partners LLC (SDLP.N) to insulate the U.S. affiliate from events of default related to the Chapter 11 proceedings by removing it as a borrower or guarantor.

In a Sept. 13 court filing, Seadrill said it had successfully ring-fenced its non-consolidated affiliates, including Seadrill Partners LLC, SeaMex Ltd and Archer Ltd.

The official committee is comprised of seven creditors with large unsecured claims, including South Korean shipbuilders Daewoo Heavy Industries and Machinery Ltd [DWHVY.UL] and Samsung Heavy Industries Co Ltd (010140.KS).

Mannal said the committee had hired both a financial adviser and an investment banker to help it decide whether to back a restructuring plan put forward by Seadrill’s largest shareholder, Norwegian-born billionaire John Fredriksen.

The plan aims to 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.

Another group of unsecured creditors has hired Rothschild and its own counsel, Stroock & Stroock & Lavan, to challenge Fredriksen’s plan.

Seadrill lawyer Brian Schartz said about 40 percent of unsecured bondholders had signed up for the restructuring plan and that it was negotiating with the remaining 60 percent.

“Hopefully, we can work on something that could be a productive outcome, but it’s too soon to say right now,” Schartz said at the hearing, where Seadrill won court approval to pay nearly $137 million in pre-bankruptcy debts to foreign suppliers.

The preliminary deadline for creditors to present an alternative plan is Oct. 11.

Reporting by Tracy Rucinski; additional reporting by Nerijus Adomaitis in Oslo; editing by Jonathan Oatis

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