Seadrill Limited has agreed to extend and/or renew the existing forbearance agreements with certain creditors, announced on 15 September 2020, in respect of the group's senior secured credit facility agreements, senior secured notes, and guarantee facility agreement.
Pursuant to the forbearance agreements, as extended, the consenting creditors have agreed not to exercise any voting rights to, or otherwise take actions, in respect of certain events of default that may arise under the senior secured credit facility agreements, senior notes and guarantee facility agreement as a result of the group not making certain interest and charter hire payments under the group's senior secured credit agreements and leasing arrangements, until and including the earlier of 31 October 2020 and any termination of the forbearance agreements.
Forbearance has not yet been agreed with respect to certain defaults that may arise under the Company's leasing agreements in respect of the West Hercules, West Linus and West Taurus. Without a forbearance in respect of these leasing agreements, non-payment of charter hire and interest could result in enforcement of a default or cross-default under such leasing agreements.
The purpose of the forbearance agreements continues to be to allow the Company and its stakeholders more time to negotiate on the head terms of a comprehensive restructuring of its balance sheet. Such a restructuring may involve the use of a court-supervised process. The Company continues to evaluate capital structure proposals from its financial stakeholders; whilst no agreement has been reached at this point it is expected that potential solutions will lead to significant equitization of debt which is likely to result in minimal or no recovery for current shareholders.
