Bermudian-based offshore drilling outfit Seadrill Ltd is to submit an application to the Supreme Court of Bermuda for the appointment of joint provisional liquidators after it filed Chapter 11 cases in the Southern District of Texas.

The cases were filed in respect of Seadrill and its consolidated subsidiaries, which the company referred to as the Seadrill Group.

The company said the joint provisional liquidators will oversee the Chapter 11 cases in conjunction with the board of directors of the company.

As part of the Chapter 11 cases, Seadrill said it has filed "first day" motions that, when granted, will enable day-to-day operations of the Seadrill Group to continue as usual.

The company said it has requested the authority to pay key trade creditors and employee wages and benefits without change or interruption and expects it will pay all suppliers and vendors in full under normal terms for goods and services provided during the Chapter 11 cases.

At the point of filing, Seadrill said it has approximately $650 million in cash and does not require debtor-in-possession financing.

The company said the Chapter 11 cases are opened to facilitate a balance sheet restructuring which will enable Seadrill to continue to operate its modern fleet of drilling units. It is expected that this will lead to significant equitisation of debt which is likely to result in minimal or no recovery for current shareholders, the company said.

Stuart Jackson, chief executive officer of Seadrill, said: “This announcement marks the start of the court supervised process that will create a company that is financially sustainable for the long term. We are working closely with our stakeholders to ensure we achieve an outcome that gives us the flexibility to weather the low points in our industry cycles, whilst positioning us well for market recovery.”

He added: “I would like to thank all our stakeholders for their continued support as we move through this legal process, in particular, our customers, vendors and employees, all of whom demonstrate continued support of our safe and efficient operational delivery."

The company said the filings are made in addition to the Chapter 11 cases filed separately for Seadrill GCC Operations Ltd, Asia Offshore Ltd, Asia Offshore Rig 1 Ltd, Asia Offshore Rig 2 Ltd and Asia Offshore Rig 3 Ltd, which were announced by the company on February 7.

Seadrill said the Chapter 11 filings do not include Seadrill New Finance Ltd and its subsidiaries; Seabras Servicos de Petroleo SA, Seadrill JU Newco Bermuda Ltd, Seadrill Member LLC, Seadrill Mobile Units UK Ltd, Seadrill Partners LLC Holdco Ltd, Seadrill Seabras SP UK Ltd, Seadrill Seabras UK Ltd, Seadrill Seadragon UK Ltd, Seadrill SeaMex 2 de Mexico S de RL de CV, Seadrill SeaMex SC Holdco Ltd, Seadrill SKR Holdco Ltd, Sevan Drilling Rig VI AS, and Sevan Drilling Rig VI Pte Ltd.

The company said the press announcement “is not intended to be, and should not in any way be construed as, a solicitation of votes of stakeholders regarding the Chapter 11 proceedings”.

Conyers Dill & Pearman is serving as Bermuda counsel for Seadrill, the company said.

The company said further information about the Chapter 11 filing will be available at www.seadrill.com/restructuring.