VAL - Seadrill - Plan Of Reorganization Suggests 95% Downside From Current Levels - Sell

• Company recently filed its disclosure statement and plan of reorganization with the U.S. bankruptcy court.
• According to the plan, creditors are expected to own an aggregate 99.75% of the new equity while recovery for existing shareholders has been set at a measly 0.25%.
• At the midpoint of the implied equity value range provided by the company's advisors, recovery per existing common share calculates to just $0.0355, thus suggesting 95% downside from current levels.
• Investors still long the company's shares should sell as soon as possible while market participants with the ability to stomach the stock's outsized volatility and deal with ugly margin requirements might consider an outright short position.
• The company is likely to emerge from bankruptcy towards the end of this year or early next year at the latest point.

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