Ocean Rig Receives Commitment for Bank Financing
Reference is made to Ocean Rig's stated strategy of securing a new contract, then looking to reduce the Company's cost of capital through a refinancing and increase its capital efficiency through returning capital to shareholders.
On December 4, 2007, Ocean Rig received a firm underwriting commitment for a senior secured loan facility from a commercial bank. The new facility would replace all existing debt and provide significant further financing capacity and flexibility to allow for a capital repayment program based on strong future cash flow. Furthermore, Ocean Rig's blended average interest rate would be reduced significantly. The proposal also allows for the arrangement of a substantial amount of unsecured debt in addition to this secured bank financing.
The financing is subject to Ocean Rig obtaining an additional three-year contract for one rig at a day rate below the current market rate, to customary conditions precedent and to final documentation.
The Board of Ocean Rig will reach a final decision on the refinancing in the near future.
The Chief Executive Officer, Trygve Arnesen, said: "I am very pleased to announce that we have received a commitment for a refinancing of Ocean Rig that meets our expectations with regards to volume and pricing. This represents a milestone in relation to our strategic plan and a good basis for future capital repayment".
Ocean Rig owns and operates two of the world's largest and most modern drilling rigs, built for ultra deep waters and extreme weather conditions. Eirik Raude is currently operating in the US Gulf of Mexico while Leiv Eiriksson is undergoing upgrades in Las Palmas in preparation for a two-year contract in the North Sea.
Manages 13 Offshore Rigs
- Avenue Capital Urges Ocean Rig To Hire Advisers (Oct 17)
- Rig Contractor Ocean RIG Files For Bankruptcy Protection In US (Mar 28)
- Ocean Rig Acquires an Ultra Deepwater Drillship for $65M (Apr 27)