The offer price is in line with what has been communicated to Seadrill by the Oslo Stock Exchange as the price required according to the decisions of the Oslo Stock Exchange's Appeals Committee on this issue. The offer period will be four weeks. The terms will otherwise comply with the requirements of the Norwegian Securities Trading Act.
The Board's decision is based on a thorough evaluation of Seadrill's position in relation to the Oslo Stock Exchange, its Appeals Committee and Eastern. The board concluded that it had no other options available than to make the mandatory offer in view of the dramatic daily penalty of NOK2 million increasing to NOK4 million which now has been set by the Oslo Stock Exchange as a means of forcing Seadrill to act in accordance with the decisions of its Appeals Committee.
Seadrill will aggressively seek full compensation from the Oslo Stock Exchange for the financial and other losses incurred by it as a consequence of being forced to make this bid.
Seadrill's claim for compensation will be based on the following:
Seadrill has acted in accordance with accepted market practice and applicable law in relation to the Total Return Swap Agreements. Seadrill should therefore not have been forced to make the mandatory bid which now is forthcoming. As a consequence, Seadrill believes that it is entitled to full financial compensation for the loss incurred as a consequence of the bid.
Four of the eight deepwater units Seadrill has under construction, including the two Eastern units, have already been awarded contracts. Specific discussions are currently in progress for the remaining units at what should be considered as favorable terms with respect to period and rates. The Board is optimistic regarding the outcome of these discussions.
Possible further investments
In view of the underlying strength of the market, the progress in securing contracts for the newbuildings, and the limited availability of quality yard newbuilding slots for 2010, the Board is considering further investment opportunities in deepwater units and tender rigs.
In order to strengthen the liquidity as well as to part finance the Eastern bid and further possible investments in deepwater or tender rig assets, the Board has decided to raise US$150 million in new equity through a private placement. The offering will be lead by Carnegie ASA and Pareto Securities ASA and is expected to be closed before opening of the Oslo Stock Exchange on April 17, 2007.
Most Popular Articles
From the Career Center
Jobs that may interest you