OSLO (Reuters) – Seadrill SDRL.OL SDRL.N has written down the value of its oil drilling rigs by $1.2 billion and hired bankers and lawyers to evaluate a financial restructuring that could allow the company to reduce its $7.4 billion debt, it said on Tuesday.

The company on Monday announced its intention to delist from the New York Stock Exchange later this month, while maintaining its Oslo Bourse listing.

Seadrill, controlled by Norwegian-born shipping tycoon John Fredriksen, had been struggling even before the COVID-19 pandemic hit oil prices and dented demand for drilling rigs.

“This industry has two fundamental challenges which are emphasized by recent events – there are too many rigs carrying too much debt,” Chief Executive Anton Dibowitz said in a statement.

“We recognize, along with others in the sector, that a number of our assets are increasingly unlikely to return to the market and need to be scrapped,” he said.

Following the impairment, the company reported a net loss of $1.57 billion for the first quarter, an increase from a loss of $295 million during the same quarter a year ago.

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