Seadrill Asia Files for Bankruptcy as Virus Ends Recovery Bet
(Bloomberg) -- Seadrill Ltd, the rig operator controlled by billionaire John Fredriksen, filed for bankruptcy protection for its Asian units after the economic downturn triggered by the coronavirus pandemic worsened a crisis in offshore oil drilling.
The filing in U.S. Bankruptcy Court in the Southern District of Texas is the second within four years by the driller that was once the industry’s largest by market value. The filing covers Seadrill GCC Operations, Asia Offshore Drilling Ltd., Asia Offshore Rig 1 Ltd., Asia Offshore Rig 2 Ltd. and Asia Offshore Rig 3 Ltd., the company said in a statement early Monday.
On Feb. 3, the company said it obtained a new forbearance agreement from the majority of its senior secured lenders, which gave it time until mid-February to come up with a plan to shore up its finances. Nine of the group’s 12 senior secured credit facility agreements have now been terminated.
Norwegian-born shipping tycoon Fredriksen founded Seadrill in 2005 and turned it into the crown jewel of his business empire. But the collapse of crude prices in 2014 forced the company to shrink its operations as oil companies slashed spending on rigs.
Seadrill completed an overhaul of its finances in July 2018 but left bankruptcy protection with bank debt of almost $6 billion. The drilling market recovered at a slower pace than the company expected and Seadrill engaged in talks with creditors again last year.
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