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Seadrill warns debt talks could leave shareholders with nothing

OSLO, Aug 25 (Reuters) - Offshore drilling rig contractor Seadrill’s ongoing attempt to restructure its massive debt could leave current shareholders with minimal or no ownership at all, the Oslo-listed company warned on Tuesday.

Demand for exploration and drilling has fallen further during the COVID-19 pandemic as oil firms seek to preserve cash, idling more rigs and leading to further overcapacity in the industry.

Seadrill, controlled by Norwegian-born tycoon John Fredriksen, said it has failed to convince its 43 lenders to adjust the terms of its $5.7 billion bank debt.

“As a consequence, we did not proceed with the bank consent and have retained financial and legal advisors to prepare for a comprehensive restructuring of our balance sheet, such a restructuring may involve the use of a court-supervised process,” it added.

Seadrill, which emerged from Chapter 11 bankruptcy court proceedings in 2018, has seen its shares drop more than 98% in the last two years.

The company had total debt and liabilities of $7.3 billion at the end of the second quarter. (Reporting by Nerijus Adomaitis, editing by Terje Solsvik)

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