Seadrill Ltd., a provider of drilling services to E&P companies, reached an agreement with its banking group on restructuring its debt amid adverse market conditions.As part of the first phase of a broader restructuring plan, the company extended the maturities of the following credit facilities:
- The $450m credit facility originally maturing in June 2016; now extended until December 2016
- The $400m credit facility originally maturing in December 2016; extended until May 2017
- The $2bn NADL credit facility originally maturing in April 2017; extended until June 2017
Further, the company amended the following covenants, extending them to 30 June 2017:
- Reset its leverage ratios on its senior secured credit facilities to 6.5x between 1 January 2017 and 30 June 2017
- Adjusted the total equity to total assets ratio by excluding the effects of market values of its drilling units, whilst maintaining a minimum ratio of 30% for the stated period
- Suspended clauses on its credit facilities which required Seadrill to post additional collateral or prepay a portion of the outstanding borrowings based on a minimum value of its drilling units
- Increased its minimum liquidity requirement from $150m to $250m
Further, the company agreed to refrain from borrowing any undrawn commitments under its senior secured credit facilities.
The company aims to restructure its debt by the end of FY 2016.
Source: Company Press Release