Seadrill unit files for bankruptcy and asks for 24 hour delay

The SEADRILL 3. REUTERS/Luis Enrique Ascui/Files

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  • The restructuring concerns the Mexican platforms
  • Noteholders will take control of the Seadrill unit

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(Reuters) – A unit of offshore driller Seadrill Ltd filed an accelerated reorganization plan in Virginia bankruptcy laws court on Tuesday, where it is expected to seek approval of the proposal on Wednesday.

The case comes just months after its parent entity emerged from its own Virginia bankruptcy laws proceedings. This reorganization plan should come into effect at the beginning of this year. Seadrill New Finance Ltd’s Chapter 11 case is intended to be the “final component” of the entire Seadrill Group’s restructuring efforts, according to a statement from financial controller Tyson de Souza.

De Souza said there were no objections to the plan and “there is no doubt that it is in the best interest” of the company, which is represented by Kirkland & Ellis.

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A representative for Seadrill Ltd did not immediately respond to a request for comment.

Seadrill New Finance, which has about $535 million in secured debt, does not have its own operations. It owns SeaMex Ltd, which owns five rigs in Mexico and underwent restructuring last year after state oil company Pemex, one of the main customers, failed to pay.

Under the proposed plan, holders of secured notes will take over most of the capital of Seadrill New Finance. The company, which says it has secured the votes it needs from creditors, will ask US Bankruptcy Judge David Jones to approve the plan on Wednesday afternoon.

Seadrill Ltd went bankrupt in 2018, emerging with billions of dollars in debt and $1 billion in new investments. It returned to Chapter 11 in 2021, blaming the sustained downturn in the oil and gas market and the economic impact of the COVID-19 pandemic.

Jones approved Seadrill Ltd’s latest restructuring plan, which aimed to reduce the company’s $5.6 billion debt by $4.9 billion, in October.

Although unusual, one-day cases of Chapter 11 have popped up occasionally in recent years. Kirkland, who also represented the parent entity in its Chapter 11 cases, has guided companies through these types of rapid court restructurings before.

The case is In re Seadrill New Finance Ltd, US Bankruptcy Court, Southern District of Texas, 22-90001.

For Seadrill New Finance: Anup Sathy, Ross Kwasteniet, Spencer Winters, Christopher Marcus and Jaimie Fedell of Kirkland & Ellis; and Jackson Walker’s Matthew Cavenaugh, Jennifer Wertz, Vienna Anaya and Victoria Argeroplos

(NOTE: This story has been corrected to reflect that Seadrill New Finance fully owns SeaMex. A previous version incorrectly stated that it was a joint venture.)

Read more:

Mexico’s Ministry of Finance concludes Pemex’s short-term debt refinancing

Seadrill lenders agree to extended use of cash, for now

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Maria Chutchian reports on corporate bankruptcies and restructurings. She can be reached at [email protected]

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