Seadrill, Ship Finance Agree to Sale/Leaseback Deal

Seadrill said that it has entered into a sale and leaseback transaction with Ship Finance International Limited.

Under the deal, Seadrill sells the jack-up rig Seadrill 3 to Ship Finance for a consideration of US$210 million. At the same time Seadrill 3 has been leased back to Seadrill for a 15-year period.

The deal also gives Seadrill a right to repurchase the rig after 3 years or on five uneven anniversaries thereafter until the end of the charter. The exercise price after 3 years is $135.5 million, decreasing to $60 million at the end of the 15-year charter.

The annual lease payment for the first 3 years will total $41.1 million. For the subsequent 4-year period, the annual lease payment will be $18.8 million. For the remaining 8-year charter period, the agreed annual lease payment is approximately $14.9 million. In addition, after Year 3 Ship Finance will receive 5 percent of the adjusted operating profit if the operating profit has reached certain threshold levels.

"This deal is an important part of SeaDrill's financing program that gives the company an increased financial flexibility,” said Seadrill CEO Kjell E Jacobsen.”

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