SFL - Update on Seadrill Limited restructuring
January 31 2017 - 9:18AM
Ship Finance International Limited (NYSE: SFL)
("Ship Finance" or the "Company") today announces that Seadrill
Limited ("Seadrill") has filed a Form 6-K with the Securities and
Exchange Commission detailing the status of negotiations with its
secured lending banks, unsecured bondholders, and potential new
money investors.
In the filing, Seadrill states that its target
is reaching an agreement on a consensual, comprehensive
restructuring plan by the end of April, with the implementation of
such plan to occur during the second quarter of 2017. In its Form
6-K filing, Seadrill makes reference to certain discussions with
its stakeholders, including Ship Finance, outlining an initial
proposal made by Seadrill in October 2016 with respect to charter
obligations for three drilling rigs owned by Ship Finance that are
on long term charters with fully guaranteed subsidiaries of
Seadrill.
Ship Finance has not agreed to the terms
proposed by Seadrill in October 2016 and summarized in today's
filing by Seadrill. In November, the Company proposed a more
balanced long-term structure through which Seadrill could meet its
commitments. No further discussions have been held between
Ship Finance and Seadrill pertaining to this matter, and no
agreement has been reached. In the meantime, Seadrill
continues to perform on its charter payment obligations.
Ship Finance structured the debt obligations and
charters relating to these rigs to position the Company for a
potential market downturn. The aggregate loan amount related to the
rigs is now approximately $875 million, down from nearly $1.9
billion when the rigs were acquired. Of the amount outstanding,
only $240 million, or 27%, is guaranteed by Ship Finance; our
balance sheet is insulated from the remaining debt.
We believe it will be in all stakeholders'
interest to have a financially stronger counterparty, and we intend
to have a constructive dialogue with Seadrill to find a sustainable
path going forward. This will also in due course include
discussions with the banks financing the three rigs in order to
find a balanced solution.
The Company will update the market when there
are new material developments.
The Board of DirectorsShip Finance International
LimitedHamilton, Bermuda
Questions can be directed to Ship Finance
Management AS:
Ole B. Hjertaker, Chief Executive Officer: +47
23114011Harald Gurvin, Chief Financial Officer: +47 23114009
About Ship Finance
Ship Finance International Limited (NYSE: SFL)
has an unprecedented track record in the maritime industry, being
consistently profitable and paying dividends every quarter since
2004. The Company's fleet of more than 70 vessels is split between
tankers, bulkers, container vessels and offshore assets, and Ship
Finance's long term distribution capacity is supported by a
portfolio of long term charters and significant growth in the asset
base over time. More information can be found on the Company's
website: www.shipfinance.bm
Cautionary Statement Regarding Forward
Looking Statements
This press release may contain forward looking
statements. These statements are based upon various assumptions,
many of which are based, in turn, upon further assumptions,
including Ship Finance management's examination of historical
operating trends. Although Ship Finance believes that these
assumptions were reasonable when made, because assumptions are
inherently subject to significant uncertainties and contingencies
which are difficult or impossible to predict and are beyond its
control, Ship Finance cannot give assurance that it will achieve or
accomplish these expectations, beliefs or intentions. Important
factors that, in the Company's view, could cause actual results to
differ materially from those discussed in this presentation include
the strength of world economies and currencies, general market
conditions including fluctuations in charter hire rates and vessel
values, changes in demand in the tanker market as a result of
changes in OPEC's petroleum production levels and worldwide oil
consumption and storage, changes in the Company's operating
expenses including bunker prices, dry-docking and insurance costs,
changes in governmental rules and regulations or actions taken by
regulatory authorities, potential liability from pending or future
litigation, general domestic and international political
conditions, potential disruption of shipping routes due to
accidents or political events, and other important factors
described from time to time in the reports filed by the Company
with the United States Securities and Exchange Commission.
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