Scorpion Offshore has finalized a $240 million loan from Seadrill Limited, the Company's largest shareholder. The Loan completes the funding of the Offshore Mischief, the Company's 7th jackup rig, and finalizes all outstanding financial requirements for Scorpion.
Proceeds from the Loan will be used to: (i) repay two Seadrill Promissory Notes in the amounts of $49.5 million plus interest and $79.7 million plus interest; (ii) repay the Offshore Freedom's Tranche B financing in the amount of $37.9 million plus interest; (iii) partially prepay the Offshore Intrepid term loan in the amount of $12.9 million plus interest; (iv) fund the remaining construction payments due to the shipyard for the Offshore Mischief in the amount of $32 million and (v) provide working capital, for amongst other uses, the start-up of the Offshore Mischief's contract in Brazil of approximately $16 million. The Loan is secured by a first mortgage on the Offshore Mischief and second mortgages on the Offshore Intrepid and Offshore Freedom. The loan matures in 5 years and bears interest at 10% per annum.
Completion of the Loan is the culmination of discussions between the Company and Seadrill representatives to have Seadrill become a long term lender to Scorpion but is not connected to Seadrill's recent announcement of its intention to make a mandatory offer for the remaining shares in Scorpion. The Scorpion Board continues to investigate strategic alternatives which would maximize value for all shareholders of Scorpion.
Scorpion Offshore Ltd is a Bermuda based corporation founded in 2005, which owns 6 state-of-the-art offshore jackup rigs built between 2007 and 2009, with the Offshore Mischief being delivered on April 28, 2010.
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