Barclays proposes alternative Seadrill restructuring plan - court filing

Barclays proposes alternative Seadrill restructuring plan - court filing
The logo of Barclays bank is seen on glass lamps outside of a branch of the bank in the City of London financial district in London September 4, 2017. REUTERS/Toby Melville
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OSLO (Reuters) – British bank Barclays Plc <BARC.L> has submitted an alternative proposal to restructure Seadrill <SDRL.OL>, the oil rig company said in a U.S. court filing.

Seadrill, which filed for Chapter 11 restructuring in a U.S. court on Sept. 12, has already received two restructuring proposals.

The Norwegian company, once the largest drilling rig operator by market value, filed for bankruptcy protection after being hit hard by oil company investment cutbacks following the fall in oil prices.

One of the proposals is from its main owner, Norwegian-born billionaire John Fredriksen and a group of hedge funds. The other came from an “Ad-Hoc Group” of unsecured bondholders, including about 40 investors from the United States, Europe and Asia.

“Indeed, the debtors (Seadrill) recently received proposals from each of Barclays and the Ad Hoc Group,” Seadrill said in the court documents filed last Friday.

Barclays, which also holds Seadrill’s bonds, was not immediately available to comment.

The court filing did not give any details of Barclays’ plan.

Seadrill said it would continue to engage with both Barclays and the Ad Hoc Group “in hopes of reaching a global resolution.”

The company also said the original plan proposed by Fredriksen represented “the highest and otherwise best value-maximising alternative.”

The proposal from Fredriksen and the group of hedge funds’s envisages investing $1.06 billion via new equity and secured debt to restructure Seadrill and its $12.8 billion in debt and other liabilities.

This plan offered holders of Seadrill’s $2.3 billion (£1.71 billion) of unsecured bonds 14.3 percent of the stock in the reorganised company, while existing shareholders would be left with just 1.9 percent.

The plan requires the approval of unsecured bondholders as their holdings will be impaired in the restructuring. In a court filing on Friday, Seadrill said this plan was backed by about 40 percent of unsecured bondholders and almost all of its bank lenders.

Seadrill’s spokesman said in an email on Monday the company had no further comments.

A hearing on the official restructuring plan will be held in U.S. Bankruptcy Court in Texas on Jan. 10.

(Reporting by Nerijus Adomaitis in Oslo, additional reporting by Jonathan Saul in London. Editing by Jane Merriman)

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