SFL Company Ltd. (NYSE: SFL) (“SFL” or the “Company”) pronounces that it has entered into forbearance agreements with Seadrill Restricted (“Seadrill”) in respect of the leasing preparations on its three drilling rigs and the corresponding financing agreements. Except prolonged or terminated, these forbearance agreements will final till December 14, 2020 (the “forbearance period”).
As well as, Seadrill has additionally introduced that it has agreed to resume its forbearance agreements with sure different collectors in respect of its senior secured credit score facility agreements, senior secured notes, and its assure facility settlement, with the intention to enable extra time to barter a complete restructuring of its steadiness sheet. Seadrill has suggested that such a restructuring may contain the usage of a court-supervised insolvency course of.
Whereas the discussions with Seadrill and its stakeholders are ongoing, the cruel setting jack-up rig West Linus and the cruel setting semi-submersible rig West Hercules stay on their respective drilling-contracts from Seadrill to grease majors within the North Sea. The semi-submersible rig West Taurus has been held in layup by the lessee for greater than 5 years.
As beforehand publicly introduced, Seadrill’s failure to pay rent below the leases for our three drilling rigs when due in October and November constituted an occasion of default below such leases and the associated financing agreements. Except cured or waived, an occasion of default below the lease agreements or the associated financing agreements may end in enforcement by us or the relevant secured lenders (as relevant). So as to cut back the danger of such a state of affairs, SFL has entered into forbearance agreements with these lenders on the identical phrases as Seadrill’s forbearance agreements with these lenders.
Through the forbearance interval, Seadrill will likely be allowed to make use of sure funds acquired from the charterers of sure rigs to pay working bills for such rigs, from October till the top of the forbearance interval. In exchange, SFL will obtain roughly 67 – 70% of the prevailing contracted lease rent associated to the West Hercules and the West Linus, respectively, for a similar interval. That is basically equal to the curiosity and amortization due on the secured bank loan amenities relating to those rigs. Any extra rent paid below the above referenced leases will stay in Seadrill’s earnings accounts pledged to SFL.
Whereas no assurances might be offered close to the result of the Seadrill restructuring, SFL continues to have constructive dialogue with Seadrill and the related financing banks to discover a long-term answer.
Please see the Firm’s public filings with the U.S. Securities and Alternate Fee, together with with out limitation, the report on Type 6-k filed with the SEC on November 16, 2020 for a dialogue of sure dangers referring to the Firm, together with dangers associated to Seadrill and its potential restructuring.
November 20, 2020
The Board of Administrators
SFL Company Ltd.
Questions might be directed to SFL Administration AS:
Investor and Analyst Contact
Aksel C. Olesen, Chief Monetary Officer: +47 23114036
André Reppen, Senior Vice President and Chief Treasurer: +47 23114055
Ole B. Hjertaker, Chief Government Officer: +47 23114011
Cautionary Assertion Concerning Ahead Trying Statements
This press launch may comprise ahead wanting statements. These statements are primarily based upon numerous assumptions, lots of that are primarily based, in flip, upon additional assumptions, together with SFL administration’s examination of historic working developments, information contained within the Firm’s data and different information accessible from third events. Though SFL believes that these assumptions had been cheap when made, as a result of assumptions are inherently topic to vital uncertainties and contingencies that are tough or unattainable to foretell and are past its management, SFL can’t give assurance that it’ll obtain or accomplish these expectations, beliefs or intentions.
Essential elements that, within the Firm’s view, may trigger precise outcomes to vary materially from these mentioned within the ahead wanting statements embody the energy of world economies, fluctuations in currencies and rates of interest, basic market situations together with fluctuations in constitution rent charges and vessel values, adjustments in demand within the markets wherein the Firm operates, adjustments in demand ensuing from adjustments within the Group of the Petroleum Exporting International locations’ petroleum manufacturing ranges and worldwide oil consumption and storage, developments concerning the applied sciences relating to grease exploration, adjustments in market demand in nations which import commodities and completed items and adjustments within the quantity and site of the manufacturing of these commodities and completed items, elevated inspection procedures and extra restrictive import and export controls, adjustments within the Firm’s working bills, together with bunker costs, dry-docking and insurance coverage prices, efficiency of the Firm’s charterers and different counterparties with whom the Firm offers, the influence of any restructuring of the counterparties with whom the Firm offers, together with any potential restructuring of Seadrill, well timed supply of vessels below development inside the contracted price, adjustments in governmental guidelines and rules or actions taken by regulatory authorities, potential legal responsibility from pending or future litigation, basic home and worldwide political situations, together with any adjustments to power and environmental insurance policies and adjustments attendant to commerce conflicts, potential disruption of transport routes as a consequence of accidents or political occasions, the size and severity of the continuing coronavirus outbreak and its influence on the demand for business seaborne transportation and the situation of the monetary markets, and different necessary elements described sometimes within the reviews filed by the Firm with america Securities and Alternate Fee.