January 25, 2018 / 7:25 PM / in 3 months

UPDATE 1-Seadrill postpones court hearing for restructuring talks

(New throughout, adds details on plan talks)

By Nerijus Adomaitis and Tom Hals

OSLO, Jan 25 (Reuters) - Drilling rig company Seadrill said in a court filing it postponed an initial hearing on its restructuring plan to Feb. 7, which sources told Reuters will give the company more time to consider alternative restructuring plans.

Once the largest drilling rig operator by market value, Seadrill filed for bankruptcy protection in Texas on Sept. 12 after being hit hard by cutbacks in oil company investment following a steep drop in crude prices.

Wednesday’s court filing also said the deadline for objecting to Seadrill’s plan had been extended to Feb. 1 for the official committee of unsecured creditors, an ad hoc group of bondholders and Barclays Capital.

The ad hoc group of bondholders and Barclays Capital have proposed alternative restructuring plans, and the ad hoc group posted a cash deposit that opened the way for talks.

The bondholders’ alternative plan and Seadrill’s preferred plan, backed by the company’s main owner, Norwegian-born billionaire John Fredriksen, would both invest around $1 billion in Seadrill to continue its business of renting drilling rigs to oil companies.

The Fredriksen plan would give unsecured bondholders a stake of about 15 percent in the company. The plan submitted by the bondholders would give them a bigger stake, but the precise size was unclear.

Fredriksen would have a major stake in the restructured company under the both plans, the sources said.

Kris Hansen, a lawyer with Stroock & Stroock & Lavan, who represents the ad hoc bondholders, did not respond to a request for comment.

Fredriksen’s plan is backed by 97 percent of Seadrill’s bank lenders, who hold about $5.7 billion in secured loans. Their approval will be needed for plan amendments.

Fredriksen also has the support of holders of 40 percent of the unsecured bonds, short of the two-thirds of bondholders he will need to avoid a tough legal fight to get the plan approved.

The ad hoc bondholder group held nearly 30 percent of the company’s unsecured bonds in October, according to a filing with the U.S. Bankruptcy Court in Houston.

Fredriksen has been trying to acquire the company’s bonds, sources told Reuters, but one source close to the talks said the bondholders signed a “lock-up” agreement that prevented the selling of their holdings.

It is the second time the company has postponed a hearing on its disclosure statement, which describes the restructuring plan and must be approved by the court before creditors can vote on the plan of reorganization. (Reporting by Nerijus Adomaitis; editing by Terje Solsvik)

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