Seadrill Ltd (NYSE: SDRL) is headed up in the market today, gaining on high volume. The gains come for a good reason too. Early this morning, the company announced that its Plan to Reorganize has been confirmed by the United States Bankruptcy Court. Of course, this excited investors, sending the stock on a run for the top. Today, we’ll talk about:
- The news;
- what we’re seeing from SDRL as a result; and
- what we’ll be watching for ahead.
SDRL Announces Court Confirmation Of Reorganization Plan
As mentioned above, Seadrill is having a strong start to the trading session this morning after announcing that its Reorganization Plan has been confirmed by the courts. In a press release issued early this morning, the company announced that the US Bankruptcy Court for the Southern District of Texas has confirmed the company’s Plan of Reorganization.
In the release, SDRL reminded investors that the Plan has near-unanimous support from stakeholders and that it expects to break free from Chapter 11 within the next 60 to 90 days. The plan is designed to strengthen capital structure while extending and re-profiling $5.7 billion in secured bank debts as well as $2.3 billion in unsecured bonds to equity. The plan also leaves employee, customer, and ordinary trade claims largely unaffected. In a statement, Anton Dibowitz, CEO and President at SDRL, had the following to offer:
Confirmation of the Plan represents a major accomplishment for Seadrill and all our stakeholders. The near unanimous support for the Plan we put forward demonstrates the level of backing we have had from all stakeholders. It is also reflects the hard work we have all put in over many months to successfully recapitalize the Company.
There is no question that Seadrill is a great company, with the best people in the industry and we will now have the platform and strengthened balance sheet to continue to develop our business and serve our customers with the high standards they have become accustomed.
What We’re Seeing From The Stock
With the news that the bankruptcy court has accepted the company’s Plan of Reorganization, and that bankruptcy will likely be over within the next 3 months, it’s no surprise to see that investors are excited and sending Seadrill to the top. As is almost always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:58), SDRL is trading at $0.26 per share after a gain of $0.035 per share (15.72%) 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, we’re interested in following the story surrounding the Chapter 11 process and excited to learn that this process will likely be over within the next few months. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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