By Gwladys Fouche

OSLO, Feb 25 (Reuters) – Rig firm Seadrill, as soon as the crown jewel within the enterprise empire of delivery tycoon John Fredriksen, will current a refinancing plan within the first half of this 12 months to deal with its $10 billion debt, it stated on Thursday.

At the peak of the oil value growth the corporate was the world’s largest offshore driller by market capitalisation, however it’s now struggling as oil firms implement drastic price cuts to counter the 70 p.c decline in crude costs since mid-2014.

Seadrill’s share value has fallen by 93 p.c over the previous two years, towards a 1 p.c decline for the Oslo benchmark index over the identical interval, however it jumped by 10 p.c on Thursday’s announcement.

Key to the refinancing plan would be the response of Seadrill’s largest shareholder, Fredriksen’s Hemen Holding, which owns a bit greater than 24 p.c of the corporate. Fredriksen has beforehand put up his personal money when different firms in his group have encountered monetary issues.

“(It is) positive for the company that a financing plan will be announced in H1 (2016), but the dilutive risk to the shares is huge in a credit event,” Carnegie analyst Johan Stroem stated.

“The company continues to cut costs, which is very positive, and they are in dialogue to delay delivery of new-build jackups (self-elevating rigs) in China,” he stated, including that he didn’t count on to vary his promote score on the inventory.

RIGS UNDER CONSTRUCTION

Seadrill has 14 rigs beneath building at Asian yards, probably including to the corporate’s debt burden when they’re accomplished within the coming years.

Out of these 14 rigs, eight are beneath building at Dalian shipyards in China, two at DSME in South Korea, two at Samsung, additionally in South Korea, one at COSCO in China, and one at Jurong in Singapore.

Seadrill has struck offers to delay deliveries of a number of items and is in talks with the yards to push again much more of those, it stated, together with eight jackup rigs being in-built China.

In January Seadrill CEO Per Wullf advised Reuters the corporate was speaking to its homeowners and lenders to shore up its steadiness sheet however that no deadline had been set.

“It’s banks, bonds and equity. It’s the entire way around,” Wullf stated of the negotiations.

Seadrill’s earnings earlier than curiosity, tax, depreciation and amortisation (EBITDA) fell to $513 million within the fourth quarter, towards $672 million a 12 months in the past and expectations for $520 million in a Reuters ballot of analysts.

The firm expects EBITDA to drop to $450 million within the first quarter of this 12 months. (Editing by Terje Solsvik and David Goodman)

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