Ocean Rig abandons plan to sell semi-sub duo to subsidiary

Leiv Eiriksson rig; Author: Ulrich Latzenhofer - under the Creative Commons Attribution 2.0 Generic license.

Offshore driller Ocean Rig has abandoned its previously announced plan to sell its only two semi-submersible drilling rigs to a subsidiary company.

To remind, Ocean Rig in late May announced the launch of an offering of common shares by its wholly-owned Marshall Islands subsidiary, Valiant Offshore, which upon the completion of the offering would acquire the Leiv Eiriksson and the Eirik Raude, two fifth generation harsh environment semi-submersible rigs.

The rigs, indirectly owned by Ocean Rig, were supposed to be sold in exchange for 24 million shares of Valiant (representing approximately 57.8% of the issued share capital of Valiant) and cash in the amount of $110 million. This amount was expected to be used towards reactivating the Eirik Raude, which is currently cold-stacked in Greece.

An additional 17.5 million shares of Valiant (representing approximately 42.2% of the share capital of Valiant) were expected to be sold in the offering. Valiant intended to use the net proceeds from the offering as partial payment for the acquisition of the Leiv Eiriksson, for working capital and for general corporate purposes.

After the plan was announced, David Carter Shinn, an analyst at Bassoe Offshore, argued that “There’s probably much more behind Ocean Rig’s recent spinoff of the Leiv Eiriksson and Eirik Raude than they’re telling us”.

However, in a statement on Friday, June 8 Ocean Rig said it had decided to withdraw the previously announced offering of common shares by Valiant Offshore.

Ocean Rig also said that, together with Valiant, it had made the final decision after careful consideration of several factors, including the interests of the shareholders of both companies. No further details have been revealed about Ocean Rig’s withdrawal from the plan.

Offshore Energy Today Staff

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