As a result of the merger, each share of Remington common stock has been converted into the right to receive $27 in cash and 0.436 shares of Helix common stock. Information regarding exchange of share certificates will be sent to Remington stockholders shortly.
To fund the cash portion of the merger consideration Helix entered into an $835 million Senior Secured Term B facility that amortizes 1% per year with a balloon payment due at the end of 7 years. Interest floats at LIBOR plus 200 and the facility is prepayable without penalty. Helix also terminated its existing $150 million revolver and entered into a new Senior Secured $300 million 5-year revolver.
Earnings guidance As a result of the acquisition and the continued strength of the Contracting Services businesses, Helix is increasing its estimated 2006 earnings to a range of $3.20 to $3.70 per diluted share. In addition, the company estimates 2007 earnings will be between $4.00 to $5.50 per diluted share.
Transfer to New York Stock Exchange Beginning the morning of July 18th, 2006, Helix will transfer its listing from the NASDAQ and begin trading on the New York Stock Exchange under the ticker symbol HLX.
Stock buyback program The company's board has authorized the company to discretionarily purchase up to $50 million of Helix common stock in the open market.
"We are extremely pleased to have closed the Remington transaction, which is immediately accretive to earnings and provides a pipeline of high-quality prospects to help fuel future growth,” said Owen Kratz, Helix’s chairman and CEO. “Due to the acquisition and further strengthening of the market for our contracting services we are increasing our earnings guidance for 2006 to a range with a mid-point 23% higher than that of our original estimate. Also, we are anticipating between 15-60% of earnings growth next year.”
According to Kratz, Helix should generate more than $1.5 billion of operating cash flow from now until the end of 2007. “[This] will allow us to pursue exciting growth opportunities in the contracting services segment; enhance reserves and production; and reduce debt, as well as fund share repurchases,” he said.
"With respect to the NYSE transfer this is a move we have contemplated for some time,” added Kratz. “With the name change earlier this year and the closing of the Remington acquisition, a NYSE-listed company, the timing is right. We are greatly appreciative of the support we have received from NASDAQ; however, we believe that this is the right move at the right time for our company and shareholders.”
Helix Energy Solutions is an energy services company that provides innovative solutions to the oil and gas industry worldwide for marginal field development, alternative development plans, field life extension and abandonment, with service lines including diving services, shelf and deepwater construction, robotics, well operations, well engineering and subsurface consulting services, platform ownership, and oil and gas production.
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