Seadrill shares slide as it prepares for Chapter 11 restructuring

Shares in Seadrill, the oil rig owner controlled by influential shipowner John Fredriksen, sank on Thursday after it said it plans to begin its Chapter 11 debt restructuring in the coming weeks, and revealed a $100m loss in the second quarter.

Seadrill has struggled since the 2014 oil price crash, and has been eyeing Chapter 11 proceedings since the beginning of this year. It said on Thursday it plans to conclude negotiations on its restructuring, which is “likely” to involve bankruptcy, “on or before September 12″. Shares fell 6 per cent in early European trading, and are down 99 per cent from their 2013 peak.

News of the restructuring plan came as the company unveiled a 34 per cent slide in revenues in the quarter to June 30, while operating income swung to a $100m loss from a $364m gain the previous year.

Anton Dibowitz, chief executive and president of Seadrill, said:

Our primary objective at the moment is concluding final negotiations on our comprehensive restructuring plan, which is at an advanced stage and likely to be implemented via Chapter 11 proceedings on or before 12th September 2017.

Our business execution remains unaffected by these efforts as demonstrated by continued delivery of excellent safety and fleet uptime. Although the market continues to be challenging, continued operational execution and strong customer relationships has enabled us to re-contract a number of units during the quarter.