Seadrill Ltd (SDRL): Seadrill Plunges After Failing To Reach...

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MisterEC

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Wednesday, 04/05/2017 5:40:04 AM

Wednesday, April 05, 2017 5:40:04 AM

Seadrill Plunges After Failing To Reach Agreement With Creditors

Seadrill Plunges After Failing To Reach Agreement With Creditors

The company warned investors are likely to receive minimal recovery for their existing shares.

Shares of Seadrill (NYSE: SDRL) plunged more than 55% on Tuesday after the company announced it had failed to reach a comprehensive agreement with creditors to avoid insolvency. Seadrill also announced the company had extended the deadline for a restructuring agreement to July 31 from the end of April as it had previously indicated.

As discussed in my previous article "Seadrill - Shareholder Dilution Impending," existing and potential future creditors seek a near total wipeout of current shareholder value through their proposal in which current shareholders would be allocated a nominal amount of out of the money warrants post-restructuring and all proposed secured credit facilities would benefit from cash sweeps starting in 2018.