By Luca Casiraghi, Dinesh Nair and Steven Church

(Bloomberg) — Seadrill Ltd., the offshore driller with the most important debtload, employed Houlihan Lokey Inc. and Morgan Stanley to advise it in negotiations on restructuring $11 billion of loans and bonds, two individuals acquainted with the matter mentioned.

Bank lenders to the corporate fashioned a committee this month to steer the talks and appointed adviser Lazard Ltd. and legislation agency White & Case, mentioned the individuals, who requested to not be recognized as a result of the knowledge is personal.

Offshore drillers are struggling to repay debt as competitors and diminished spending by oil firms harm income. Falling demand for rig companies is forecast to scale back gross sales on the world’s largest offshore contractors by 25 % this yr and at the very least 10 % in 2017, in accordance with Bloomberg Intelligence analyst Andrew Cosgrove.

Spokesmen at Seadrill, Houlihan Lokey, Lazard, Morgan Stanley and White & Case declined to touch upon the appointments.

Seadrill has $2.6 billion of unsecured bonds and $8.4 billion of financial institution amenities. Almost $3.5 billion of debt is due by the tip of subsequent yr, in accordance with knowledge compiled by Bloomberg. The firm’s $948 million of bonds due September 2017 are quoted at about 45 cents on the greenback, the information present.

Shares Surge

Seadrill’s shares rose as a lot as 8.4 % in Oslo on Wednesday, the most important improve in three weeks, in accordance with knowledge compiled by Bloomberg.

The firm, managed by billionaire John Fredriksen, goals to have a plan agreed with bondholders and banks by the tip of June, Chief Executive Officer Per Wullf mentioned in an interview on Feb. 26. Getting to a deal shall be advanced, partially as a result of Seadrill has greater than 40 financial institution collectors throughout a dozen syndicates, Wullf mentioned.

The restructuring might embody a debt-for-equity swap, Bloomberg Intelligence’s Cosgrove wrote on March 24. Analysts together with Janne Kvernland of Nordea Bank AB say the plan might contain the problem of at the very least $1 billion in new fairness.

–With help from Mikael Holter.

© 2016 Bloomberg L.P