Seadrill LTD (NYSE: SDRL) announced recently that it has begun a "comprehensive restructuring," including pre-arranged Chapter 11 bankruptcy filings that will allow the company to substantially reduce its debt load and emerge a stronger, better company. Furthermore, the announcement also disclosed that existing shareholders should retain part of the company when it recapitalizes in the near future.
While the bad news for existing shareholders is that much of their interest in Seadrill will be diluted when the majority of the company's equity is exchanged to bondholders and lenders as part of its pre-negotiated restructuring, it's clear that some investors think this is an opportunity to get in on the company before it comes out of Chapter 11.
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Source: Fool.com