Seadrill sells down stake in SapuraKencana in US$300m sale

by **Cals** Thu 10 Apr 2014, 13:39

Business & Markets 2014

Written by theedgemalaysia.com

Thursday, 10 April 2014 09:53

KUALA LUMPUR: Norway’s Seadrill Ltd, SapuraKencana Petroleum Bhd’s second largest shareholder, has sold 230 million shares of the integrated oil and gas services provider, raising some US$300 million (RM989 million) in proceeds.

In a statement late yesterday, Seadrill said the total gain realised from the sale is about US$165 million. Following the completion of this transaction, Seadrill will continue to own 490 million shares or an 8% stake in SapuraKencana.

“Tor Olav Trøim will continue to serve as a board member of SapuraKencana, with Seadrill chairman, president and director John Fredriksen as an alternate director,” said Seadrill.

On April 30 last year, Seadrill increased its stake in SapuraKencana to 12% as a result of the integration of its tender rig business into SapuraKencana. The target was to develop a strong leading player in the Far East integrated service market.

Since completing this transaction, SapuraKencana has made significant progress in integrating the two businesses and taking delivery of an additional three tender rigs under construction at the time of the transaction. This progress has partly been reflected in the positive share price development.

Seadrill said it remains a long-term strategic investor in SapuraKencana and, in connection with the sale, has entered into a lock up agreement for its remaining shares until end-2014.

“Seadrill will continue to support SapuraKencana’s strategy of growing its broad offshore service portfolio. SapuraKencana has strengthened its position in the Asian market and has significant international growth opportunities,” it added.

In the same statement, Fredriksen said Seadrill is satisfied with the progress of its partnership with SapuraKencana, both in the integration of the tender rig business and in the development of its pipe laying support vessels joint venture in Brazil.

“We are today working together on several new businesses with the target of creating new growth opportunities supported by long-term contracts. Our support for one of our closest partners is unwavering and we look forward to many years of future cooperation,” he added.

Reuters reported yesterday that Seadrill was offering up to 230 million shares of SapuraKencana at RM4.30 each, putting the total value of the deal at up to RM989 million. The price was at a 3.4% discount to yesterday’s closing price of RM4.45.

The deal was said to consist of a base offer of 180 million shares, with an option to grow by 50 million shares, according to a term sheet of the deal seen by Reuters. Maybank was hired as sole placing agent for the selldown.

This article first appeared in The Edge Financial Daily, on April 10, 2014.