Seadrill New Finance further updates on restructuring, SeaMex JV

By Sarah Lizee

Olympia, Wash., Aug. 31 – Seadrill Ltd. and Seadrill New Finance Ltd. announced the entry into a restructuring implementation deed (RID) by the joint provisional liquidators of SeaMex and the refinancing of the SeaMex senior secured bank debt by the issuance of new senior secured notes.

SeaMex is a 50/50 joint venture entered into by one of Seadrill New Finance’s subsidiaries, Seadrill JU Newco Bermuda Ltd.

The RID sets out the steps required to implement the SeaMex restructuring, Seadrill said. A key step in the RID is the sale of the assets of SeaMex out of provisional liquidation to NewCo, a newly incorporated wholly owned subsidiary of the Seadrill New Finance.

The share purchase agreement, which will effect the sale, is in agreed form and is expected to be entered into by the relevant parties shortly, Seadrill said.

Under the agreement, SeaMex will sell substantially all of its assets to NewCo in return for NewCo assuming substantially all of SeaMex's liabilities, release of the guarantee provided by SeaMex in respect of the new SeaMex notes, with NewCo acceding as guarantor in respect of the new SeaMex notes, and release of a substantial part of debt owed by SeaMex to one of the issuer's indirect subsidiaries, Seadrill SeaMex SC Holdco Ltd., with a material amount remaining owing by SeaMex as part of the agreed implementation steps.

The completion of the sale is subject to certain customary conditions, including certain antitrust approvals.

In addition, some of the debt owed by SeaMex to SC Holdco is being accelerated as part of the orderly implementation of the SeaMex restructuring given the objective to release a substantial part of this debt as partial consideration for the sale of the SeaMex assets.

The RID also contains certain customary provisions, including certain customary releases.

The new SeaMex notes will be in the amount of $219 million, including the upfront fee, have a three maturity, and bear interest at 12% pay-if-you-can, payable quarterly.

The notes will be secured on a senior basis by substantially all the assets of the SeaMex group.

The issue may be upsized by an additional uncommitted shelf note facility in a principal amount of up to $120 million.

As before, under Seadrill Ltd.’s plan of reorganization, existing shareholders of Seadrill Ltd. will receive 0.25% of the new equity, subject to dilution, if classes 4 and 6 of its creditors vote to accept the plan, and otherwise will not receive any recovery.

London-based Seadrill owns, operates and acquires offshore drilling rigs. Seadrill Partners and Seadrill Ltd. made their Chapter 11 bankruptcy filings on Dec. 1, 2020 under case number 20-35740 and Feb. 7, 2021 under case number 21-30427, respectively.

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