By Mikael Holter (Bloomberg)–Seadrill Ltd dove to the most affordable considering that it arised from insolvency much less than year ago after Carnegie Investment Bank abdominal muscle suggested offering the shares and also reduced the cost target by 88% in the middle of installing recuperation problems.

The overseas gear market recuperation is “not happening fast enough” for Seadrill, Carnegie claimed in a note to customers onMonday The financial investment financial institution reduced its referral from a buy and also decreased the target cost to 25 kroner from 210 kroner.

The gear firm managed by billionaire John Fredriksen arised from insolvency security in July after a drawn-out fight with lenders. Despite increasing brand-new resources and also reducing obligations, Seadrill still has practically $6 billion of financial institution financial debt that was lowered the roadway to allow it to await far better times.

Seadrill dropped as long as 17% to 39.22 kroner a share on Monday, the most affordable degree considering that re-listing at the end ofJuly The supply has actually gone down constantly considering that Thursday, when oil’s worst day of the year pressed market shares down.

Seadrill had $7.8 billion in obligations at the end of the initial quarter, consisting of $5.7 billion in safeguarded financial institution financial debt. It will certainly begin amortization settlements in 2021 at the most recent and also deal with the initial maturations the list below year, and also Carnegie approximated yearly rate of interest prices at $400 million.

“We see a high probability of liquidity drying up by 2021/22,” Carnegie experts Frederik Lunde and also Lauritz Georg Karvel claimed in the note. “The severe cut in target price is a function of the high debt.”

Recent agreements for ultra-deepwater drillships had by Diamond Offshore Drilling Inc., because of begin in 2020 and also 2022, show a substantial enhancement in future rental prices– yet not nearly enough for Seadrill to satisfy its financial debt maturations, Carnegie claimed. The Diamond prices, approximated at as long as $295,000 a day, are practically two times the existing cost, according to the financial institution. But that contrasts to presumptions of around $400,000 for 2020 and also 2021 in Seadrill’s December 2017 organization strategy underpinning the firm’s restructuring.

“Simplistically, one could say that the recovery is way behind schedule,” Carnegie claimed in the note.

When spoken to by Bloomberg on Monday, a Seadrill representative described remarks by Chief Executive Officer Anton Dibowitz recently that he continues to be certain that the marketplace will certainly recoup in time.

Carnegie is the only financial institution encouraging customers to market Seadrill, which has 12 buy and also one hold referral.

© 2019 Bloomberg L.P