Seadrill, the offshore driller controlled by the billionaire John Fredriksen, plunged for a second day amid speculation the company will be forced to file for bankruptcy as talks with investors and creditors drag on.
The stock slumped 1.69 Norwegian kroner, or 20 per cent, to 7 kroner as of 9:44am in Oslo on Wednesday. It slid 38 per cent on Tuesday, closing at a record low.
Seadrill on Tuesday reached an agreement to extend the maturity on loans totaling US$2.9 billion, pushing back a deadline for the restructuring to July 31 from the end of this month. Even so, a restructuring deal will probably include “schemes of arrangement or chapter 11 proceedings”, the company said. Mr Fredriksen said it was not certain that Chapter 11 would be the final outcome, although bondholders and shareholders will face dilution.
The company is in talks to restructure the heaviest debt-load in the oil-rig industry, which became difficult to handle after oil prices started to tumble in 2014. With net interest-bearing debt of $8.9bn at the end of 2016, the former top company of Mr Fredriksen’s business empire has been particularly exposed as oil companies slashed spending, reducing demand for drilling even as new rigs ordered during the boom years added to the oversupply.
* Bloomberg
business@thenational.ae
Follow The National's Business section on Twitter
