Seadrill Ltd (NYSE: SDRL) is having an incredibly strong day in the market today, and for good reason. As the company continues to make its way through the chapter 11 bankruptcy process, it has announced that it has entered into a settlement that will allow it to move forward with restructuring plans. Today, we’ll talk about the news, what we’re seeing from the stock, and what we’ll be watching for with regard to SDRL ahead.
SDRL Gains On Settlement News
As mentioned above, Seadrill is having an incredibly strong day in the market today after announcing that it has reached a global settlement. In a press release issued early this morning, the company announced that it has succeeded in reaching a global settlement with an ad hoc group of bondholders, the official committee of unsecured creditors, and other major creditors involved in various chapter 11 cases around the world.
In the release, SDRL said that as a result of the settlement, approximately 70% of the Company’s bondholders by principal amount have now signed an agreement to support the restructuring of the company. Also, the company reminded investors that about 99% of the company’s bank lenders by principal amount have signed the agreement in the past and remain party to the agreement. In a statement, Anton Dibowitz, CEO and President of Seadrill Management Ltd., an important piece of the extensive SDRL network, had the following to offer:
The settlement is a pivotal moment in our efforts to implement a broadly-consensual comprehensive restructuring plan. We now have virtually all of our bank lenders, a supermajority of our bonds, the official creditors committee, newbuild contract counterparties, and our largest shareholder supporting our restructuring. We look forward to the successful implementation of the transaction in the near future.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. In this particular case, the news proved to be overwhelmingly positive. After all, Seadrill now has the support of the majority of its bondholders and lenders to move forward with restructuring plans. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:03), SDRL is trading at $0.28 per share after a gain of $0.02 per share or 8.37% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on SDRL. In particular, now that the company has the support of those involved to move forward, we’re excited to follow the process of restructuring the company. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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