US-listed drillship owner Seadrill Partners has filed for a debt reorganisation under Chapter 11 of the country's bankruptcy code.
The company, a spin-off of John Fredriksen-backed Seadrill, said it had been in talks about a restructuring of its balance sheet with an ad-hoc group of lenders representing its term loan B credit facility.
In consultation with these banks, Seadrill Partners has filed voluntary petitions to "preserve value and continue the operation and marketing its assets".
The company intends to use the bankruptcy process to ensure that all obligations are met without interruption and to complete a "consensual" restructuring of its debt.
The company has been hit by years of low oil prices.
Parent Seadrill has also warned it could use the Chapter 11 process to restructure, after emerging from the process once before in 2018.
Seadrill has said a debt to equity swap could wipe out current shareholders.
The daughter company has 11 drillships and has not been paying interest on loans after posting a $1.1bn loss in the first half of the year.
Big liabilities
Seadrill Partners listed between $1bn and $10bn of liabilities, according to a court document.
In its first half report, total cash at 30 June stood at $559m, while interest-bearing debt was $2.8bn.
Of this amount, $227.8m in bank debt was repaid in July, and the $2.6bn term loan B matures in February 2021.
"The company does not expect to have adequate liquidity to meet its 2021 debt maturity and recapitalisation discussions with lenders representing a majority of the term loan B are ongoing," Seadrill Partners said in August.
Both companies are looking to agree a long-term refinancing deal.
Fredriksen stepped down as Seadrill chairman in November last year, retaining a 27% stake.
