Odfjell Drilling eyes Stena Midmax rig

Odfjell Drilling, an international drilling, well service and engineering company, is considering to acquire the Stena Midmax, a Moss CS60E semi-submersible drilling rig.

Odfjell Drilling informed on Thursday it was contemplating to offer new common shares in a private placement raising gross proceeds of up to approximately NOK 1.56 billion, equivalent to up to approximately $200 million and use the net proceeds to finance its growth ambitions.

According to the company, one of the opportunities for growth is the potential purchase of the Stena Midmax rig to be constructed at Samsung Heavy Industries. However, no decision has been made to purchase the unit, said Odfjell.

It is worth reminding that the UK driller Stena Drilling ordered the Stena Midmax rig from the South Korea’s Samsung Heavy in 2013. However, the driller cancelled the order in 2017 claiming Samsung was unable to complete and deliver the unit within the contractually agreed timeframe.

In the event that the company should decide to purchase the unit, the unit would among other also be financed through issuance of preference shares and warrants to be subscribed by Akastor or an affiliate.

Akastor on Thursday confirmed that an Akastor-owned company was in advanced discussions with Odfjell Drilling to finance $75 million of the rig acquisition by subscription of a perpetual preferred equity instrument to be issued by Odfjell. A warranty package would also be included in the structure.

Akastor said it would revert with further details should the advanced discussions lead to a final agreement between Odfjell and Akastor.

Odfjell raises $175M

Later on Thursday, Odfjell Drilling said that the private placement had been successfully subscribed, raising gross proceeds of NOK 1.368 billion, equivalent to approximately $175 million through issuance of 38 000 000 new common shares at a subscription price of NOK 36.00 per offer share.

Following the completion of the private placement, Odfjell Drilling’s board of directors also resolved to propose a subsequent offering directed towards shareholders not participating in the private placement.

The company said it intended to carry out a subsequent offering of up to 4 327 778 new common shares raising gross proceeds of up to NOK 155.8 million, in which shareholders in the company would receive subscription rights. The subscription price in the subsequent offering would be the same as in the private placement, i.e. NOK 36 per share.

It is also worth mentioning that, back in January Samsung said it had signed a contract to deliver the rig to the new owner for around $500 million. The company did not say who the new client was, only describing it as a “European shipowner.”

Offshore Energy Today Staff