Seadrill Limited and the Issuer yesterday announce that the Issuer has emerged from chapter 11 after successfully completing its pre-packaged restructuring pursuant to its chapter 11 plan of reorganization (the “Plan”). As previously announced, the Plan was confirmed by the United States Bankruptcy Court for the Southern District of Texas on January 12, 2022. All conditions precedent to the restructuring contemplated by the Plan have been satisfied or otherwise waived. Seadrill New Finance Limited will shortly be renamed Paratus Energy Services Ltd..

In accordance with the Plan, post emergence the board of directors of the Issuer shall consist of between three and five members, up to four of which shall be appointed by the Issuer’s noteholders, with the remaining director to be appointed by Seadrill. As such, a newly constituted board of directors of the Issuer was appointed today, consisting of Mei Mei Chow, Jim LaChance, Matt Lyne, and James Ayers. Sergio Delgado will initially act as an observer.

The Plan, which received support from an overwhelming majority of existing stakeholders, provides the Issuer with financial and strategic flexibility and stability. Benefitting from both the new ownership structure and the continuity provided by the Seadrill group, the Issuer expects to continue to focus on maximizing value for all stakeholders from its portfolio of investments including the Seabras Sapura JV and the SeaMex group.

As noted in previous announcements, the key terms of the Plan included:

• the release by the holders of the Issuer’s pre-existing 12.0% Senior Secured Notes due 2025 (the “Noteholders” and the “Notes”, respectively) of all existing guarantees and security and claims (if any) with respect to Seadrill and its subsidiaries (excluding the Issuer and certain of its subsidiaries);
• the Noteholders receiving 65% of pro forma equity in the Issuer, with Seadrill Investment Holding Company (a subsidiary of Seadrill) retaining the remaining 35% of pro forma equity in the Issuer, effecting a separation of the Issuer and its subsidiaries (including the Seabras Sapura assets and the SeaMex group) from the consolidated Seadrill group;
• the issuance of new notes pro rata to Noteholders on amended terms including:
• total amount of reinstated new notes: $620,148,899;
• maturity date: July 15, 2026;
• interest: either (a) 9.0%, consisting of (i) 3.00% cash interest plus (ii) 6.00% PIK interest, or (b) 10.0% PIK, in each case payable quarterly;
• call protection: redemption price:
• prior to July 15, 2022: 105%;
• on or after July 15, 2022: 102%; and
• on July 15, 2023 and thereafter: 100%;
• the Noteholders will have a first priority right to fund any additional liquidity needs of the Issuer or its affiliates; and
• Seadrill or its subsidiaries will continue to provide certain management services to the Issuer’s group.

The Plan also provided for the satisfaction of all trade, customer, and other non-funded debt claims in full in the ordinary course of business.

Copies of the key chapter 11 documents are available at the following website: https://cases.primeclerk.com/SeadrillNewFinance/.

If any Noteholders entitled to receive shares pursuant to the Plan did not submit the relevant documentation by the relevant deadlines, details will be available from tomorrow at the following link with further information on how to claim your equity distribution. Alternatively, please contact Prime Clerk at [email protected]. Please note that the final deadline for a Noteholder to claim the equity distribution it may be entitled to under the Plan is 365 days from today’s effective date.

Kirkland & Ellis LLP and Slaughter and May served as legal advisors to the Issuer in connection with the restructuring. Akin Gump Strauss Hauer & Feld served as legal advisors to an ad hoc group of the Noteholders (the “Ad Hoc Group”), and Ducera Partners LLC served as the Ad Hoc Group’s financial adviser.

This announcement relates to Seadrill New Finance Limited and is not expected to impact the recoveries existing shareholders of Seadrill Limited will receive under the Seadrill Limited Plan. Consummation of the Seadrill Limited Plan is subject to a number of customary terms and conditions, including court approval, which was obtained on October 26, 2021.
Source: Seadrill