Aker Drilling Offshore Services Public Ltd., Cyprus, a wholly owned subsidiary of Aker Drilling ASA, has signed a letter of intent with Daewoo Shipbuilding and Marine Engineering in South Korea for the delivery of two drillships in the fourth quarter of 2013, with options for two more for deliveries in 2014 and 2015.
The price per ship, including spare parts, drilling equipment, construction follow up, and activities up to "ready to drill" is estimated at $600 million; 25 percent of the contract value is due at the signing of the final contract agreement at the end of February 2011, and 75 per cent will be paid on delivery.
The ships can drill wells up to 12,000 m deep, at water depths of up to 3,600 m.
The orders are part of a strategy to take Aker Drilling into deepwater growth markets that also includes raising up to $600 million through an IPO on the Oslo Stock Exchange. That move will see parent Aker ASA become a minority shareholder in what it says will be "an independent drilling company with an offensive strategy."
Aker ASA president and CEO Øyvind Eriksen says that Aker Drilling has a first class operational organization and two harsh environment rigs equipped for deepwater drilling with stable operations on the Norwegian Continental Shelf.
"The LOI for the two drillships provides us with the opportunity to participate in interesting growth areas for drilling operations in ultra-deep waters in areas such as Brazil, the Gulf of Mexico and Western Africa," says Mr. Eriksen. "The company has already commenced the work to establish an experienced construction follow-up team at the yard and an international, competent operational organization."
Institutional and private investors will be invited to invest in the drilling company through the IPO. Aker says it will retain a strong position, but will reduce its ownership to less than 50 per cent, in order to enable the new Aker Drilling to develop as an independent company listed on Oslo Stock Exchange with a liquid trade of the shares. The new board will have a majority of members elected by the shareholders who are independent of Aker.
In connection with the financing of the new drillships and the IPO, Aker Drilling says it will carry out a refinancing of the company. Aker Drilling is currently in discussions with a bank syndicate in order to increase the drilling company's bank loans from $605 million to $900 million. The increase of $295 million will be used to repay debt to Aker ASA. The company also aims to replace its three year NOK 1.5 billion bond loan with a longer-term bond loan at the same value, but without the guarantee from Aker ASA.
Today, Aker Drilling said that Arctic Securities, DnB NOR Markets, Pareto Securities and RS Platou Markets have been retained as financial advisors and facilitators of the IPO on the Oslo Stock Exchange.
January 21, 2011