Ocean Rig Takes Action To Improve Financial Status
Ocean Rig has received commitments totaling US $15 million (approximately NOK 110 million) in new share capital from investors representing approximately 80 percent of the share capital including the convertible bonds issued in August 2002.
The new share issue will be subscribed for at an extraordinary general meeting. A notice to attend this meeting will be sent to all shareholders early next week. The issue price is set at NOK 1 per share. A subsequent issue will be carried out for other shareholders and holders of mandatory convertible bonds issued in August 2002 on the same terms.
The issue is carried out as a result of the higher than expected cost increase to complete Eirik Raude estimated at US $25 million and loss of income caused by the delayed delivery of the rig as well as to secure necessary working capital/cash reserves for the operation of the Company's two semisubmersible ultra deepwater rigs. The commitments for new shares are subject to the Company reaching an agreement with its bank syndicate regarding the initial repayment profile during the period up to July 2003 and a somewhat lower requirement for minimum cash reserve. Negotiations with the banks are ongoing and it is expected that an agreement will be reached prior to the date of the extraordinary general meeting. The Company is servicing all debt according to respective agreements.
With the new capital and the modified terms of the bank loan as described above, the Company's projection for 2003 shows that the operation of the rigs will generate a positive cash flow after the full servicing of all of the Company's debt.