* Restructuring $14 bln in debt and liabilities
* Restructuring talks extended by 3 months to July 31
* CEO says Fredriksen involved in the talks
* Shares fall to record low (Adds detail on Seadrill bonds)
By Ole Petter Skonnord and Terje Solsvik
OSLO, April 4 (Reuters) - Drill rig operator Seadrill warned investors that its shares will lose almost all of their value and its bonds will be hit as the Norwegian company prepares for potential bankruptcy proceedings to restructure $14 billion in debt and liabilities.
Shares in Seadrill, once the crown jewel in shipping tycoon John Fredriksen's empire, fell as much as 46 percent on Tuesday to a record low. The company has been hit by low oil prices, which have forced oil companies to cut costs, hammering rig rates.
Seadrill, which first warned in February that Chapter 11 bankruptcy protection was a risk, said in a statement that its banks and other lenders had agreed to extend restructuring talks by three months to July 31.
In February, finance sources said Fredriksen, who owns almost a quarter of Seadrill, might put in more of his own money if other investors followed suit. Fredriksen has put up money in the past when a restructuring of his other businesses was required. But Seadrill's statement on Tuesday dampened these prospects.
The company is negotiating with more than 40 banks, including Norway's DNB, Sweden's Nordea and Denmark's Danske Bank, as well as with bondholders and several rig-building yards.
Seadrill said extending the deadline of the talks would allow additional time to negotiate with banks as well as potential new investors, but the outlook was grim for shareholders.
"We currently believe that a comprehensive restructuring plan will require a substantial impairment or conversion of our bonds, as well as impairment, losses or substantial dilution for other stakeholders," Seadrill said.
"As a result, the company currently expects that shareholders are likely to receive minimal recovery for their existing shares ... We expect the implementation of a comprehensive restructuring plan will likely involve schemes of arrangement or Chapter 11 proceedings," it said.
Thomas Larsen, a credit analyst at brokerage DNB Markets, said: "The comment about Chapter 11 was previously said, but today Seadrill is a little bit more vocal about it."
Seadrill Chief Executive Per Wullf told Reuters that Fredriksen, the company's chairman and top shareholder with a 23.6 percent stake, is still involved in the restructuring talks.
"They are still part of it," Wullf said, referring to Fredriksen and his family holding company Hemen, which owns multi-billion dollar stakes in industries ranging from fish farming to oil tankers and real estate.
The CEO declined to say whether Hemen or Fredriksen were prepared to inject cash as part of the restructuring.
"I can't say anything more about that now. We're in the middle of negotiations," Wullf said.
Harald Thorstein, a close collaborator of Fredriksen, declined to comment.
Larsen at DNB Markets, which has a "sell" recommendation on Seadrill, said it was now likely the debt restructuring would involve legal proceedings. "We expect this deal will probably have to involve some court process," he said.
Seadrill's $1bn 5.625 percent September 2017 note was unchanged on Tuesday, bid at 40.5 percent of face value according to Thomson Reuters data.
This is up from lows of 32 percent of face value hit at the start of March, pointing to greater optimism among bond investors about the chances of getting higher recoveries in the restructuring. (Additional reporting by Gwladys Fouche and Nerijus Adomaitis in Oslo, Jonathan Saul and Robert Smith in London; editing by Alexander Smith and Jane Merriman)