A few years ago, Seadrill was John Frederiksen’s most valuable asset. Analysts now believe the company will disappear altogether.
On Friday, Seadrill announced via a stock exchange announcement that the company lost NOK 5.5 billion in the first half of the year.
The rig industry has long struggled to respond after the 2014 oil crisis, and many took a major hit when oil prices fell again in the spring of 2020.
Seadrill, once the world’s largest drilling company, is no exception: John Frederiksen’s drilling company is undergoing a major restructuring, after the company was forced to file for bankruptcy protection in 2020.
At most, before the drop in oil prices in 2014, the company was close to NOK 150 billion.
Now, Martin Hosebe Carlsen, DNB Markets analyst, tells Finansavesen that the operation meant the hook on Seadrill’s door.
– I don’t think Seadrill is in six months, Huseby Karlsen tells Finansavisen.
Scroll up to secure Seadrill fleet
Finansavisen has spoken to sources who say Transocean and Dolphin Drilling have made a joint bid of NOK 15.4 billion for Seadrill’s fleet – and the duo shouldn’t be the only ones interested.
Analyst Huseby Karlsen believes that the Seadrill fleet will be sold in several parts after the completion of the comprehensive restructuring. It may take several months.
Transocean is a desperate buyer because the company must reduce its debt ratio. One way to do this is to get more rigs into the fleet and issue stock as a payment. On the other hand, Dolphin has to secure more rigs – otherwise it won’t be a life saver. These are enthusiastic buyers, but I think the outcome for Seadrill’s role will be a restructuring and a more streamlined sales process afterward, Huseby Karlsen tells Finansavisen.
Read also: John Frederiksen resigns as Seadrill CEO
Fredricksen has been sold
Seadrill ended up with operating EBITDA of $20 million in the first half of 2021. The backlog is now $2.1 billion, which is equivalent to 19 billion kroner.
At the end of July, Seadrill sent an announcement to the stock exchange that John Fredriksen was selling 100,000 shares in the company Through the investment company Hemen Holding. Consequently, he now owns about 25 percent of the shares in Seadrill Limited.
Seadrill’s stock has moved like a stock yo-yo for the period this summer, with an impact of up to 25 percent from day to day. This happened after the bailout was implemented, as Seadrill reached an agreement with major lenders on a plan that would secure further operation.
The plan means reducing the debt by about five billion dollars and increasing the new capital by about 350 million dollars. The banks and funds that acquired Seadrill have converted about 85 percent of the debt into equity. Some lenders will also provide the company with $300 million in new capital in loans.
The plan means that existing shareholders will be left with about 0.25 percent of the ownership and will be left with crumbs.
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