Seadrill Ltd. Seeks To Increase Stake In Sevan

June 26, 2013

Bermuda-based Seadrill Ltd., an offshore driller controlled by billionaire John Fredriksen, is seeking to buy 50.1 percent of Sevan  Drilling ASA to veto financing plans for the firm that it says would destroy shareholder value.

Seadrill, headquartered in Hamilton, hired DNB Markets to look to purchase as many as 116.9 million shares in Norwegian-based Sevan at 3.95 kroner a share, it said in a statement. The company today [June 26] increased its stake in Sevan, an operator of deep-water drilling rigs, to 30.4 percent, it said in a separate statement.

The Norwegian operator, which owns two ultra-deepwater drilling units and has two more being built, said June 19 it agreed terms on a $1.45 billion, five-year bank facility. Together with a $500 million bond issue, the money would give the Oslo company enough cash to pay for the completion and mobilisation of two new units, due for delivery in Septemberm 2013 and April 2014.

The funding proposal as it stands “is value destructive,” Seadrill said today. “Subject to completion of the proposed share purchase, Seadrill will seek to propose an alternative and improved financing structure.”

Seadrill, one of the world’s largest owners of ultra-deepwater drilling rigs, is expanding its fleet in anticipation of rising demand from oil companies that are extending the search for oil and gas reserves into deeper and harder-to-access parts of the world.

If Seadrill is successful in buying 50.1 percent, it will call an extraordinary meeting of the company’s shareholders to propose a new board and offer to take over management of it rigs, the driller said. If it’s unable to buy the stake, Seadrill will consider selling its shares, it said.

Established in Bermuda in 2005, Seadrill is managed from Norway by Seadrill Management AS.

Seadrill has operations in countries that include Angola, Brunei, the Republic of Congo, Indonesia, Malaysia, Nigeria, Norway, Thailand, Brazil and the United Kingdom among others.

The company operates semi-submersibles, jack ups and drillships. It sold its tender rig and semi-tender operation to SapuraKencana in 2012.

Seadrill is listed on Oslo Stock Exchange and the New York Stock Exchange.

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