Seadrill cancels $253m in financial gurantees to oil services company

As part of its restructuring plans, offshore drilling contractor Seadrill has agreed with Archer, an oil services company, and its lenders to cancel about $253m in financial guarantees provided by Seadrill in exchange for a cash payment of about $25m.

The Bermuda-based company said that it continues to be talks with Archer and its lenders to extinguish the remaining $25m worth of financial guarantees in exchange for another cash payment representing 10% of their face value.

As part of Archer's restructuring plans, Seadrill has also agreed to convert $146m in subordinated loans provided to Archer into a $45m subordinated convertible loan with an interest rate of 5.5% maturing in December 2021.

The company will also have a conversion right into equity of Archer in 2021 based on a strike price of $2.083 per share, which is about 75% above the price in Archer's private placement in February.