Norwegian driller buys into TTA's offshore operation

Seadrill Ltd, a global offshore drilling company, will spend US$54 million to acquire one-third of the shares in the offshore drilling unit of the SET-listed shipper

Thoresen Thai Agencies Plc (TTA) in a private placement.
Norway-based Seadrill has acquired 13.5 million of the total 20 million new shares issued by Asia Offshore Drilling Ltd (AOD) at $4 apiece.
Singapore-listed Mermaid Maritime Plc, a unit of TTA, will acquire 3.7 million new shares with the rest to be sold to institutional and retail investors.
The transaction, which will mobilise $80 million once it is completed, will make Mermaid and Seadrill the largest shareholders in AOD with equal shares of 33.75%. Currently, Mermaid controls 49% of AOD.
AOD is in the process of listing on the Oslo Axess (Norway) with trading expected to start no later than July 29. Proceeds will be used to finance the purchase orders of the third and fourth jack-up drilling rigs for AOD.
"This strategic partnership with a premier offshore drilling company is a very positive step for Mermaid and AOD," said ML Chandchutha Chandratat, TTA's president and chief executive. "Equally important, the $80-million fundraising was done successfully under very challenging market conditions."
Over seven months, AOD has mobilised $180 million from the equity markets, demonstrating market confidence in the medium-term prospects of AOD, he added.
TTA's chief financial officer, Thitima Rungkwansiriroj, said the private placement had nothing to do with the shipping firm's disputes with minority shareholders.
Dissident minority shareholders in the so-called Friends of TTA group have demanded an extraordinary general shareholders' meeting and the resignation of the board of directors, saying they are unhappy with TTA's financial performance and business diversifications in recent years.
"We've planned the private placement to raise funds for AOD, which requires a huge sum of investment to do the business," Ms Thitima said. "But we don't need to use our money for all of that. We can use somebody else's."
With shipping rates down to a low level, the management has been confident that business diversification is the right strategy for TTA, she added.
Seadrill, which is listed on the New York and Oslo exchanges, generated revenue of $4.04 billion last year and a net profit of $1.17 billion. With market capitalisation of $16 billion, it has a fleet of 60 drilling rigs, including 24 in Southeast Asia.
AOD was established late last year as TTA spun off the offshore drilling business of Mermaid, which operates sub-sea engineering services. It has ordered three drilling rigs with deliveries scheduled for next year's fourth quarter and the second and third quarters of 2013.
Last December, it completed its first private placement worth $100 million, which was used to pay for the first two rigs.
Shares of TTA closed yesterday on the SET at 19.20 baht, unchanged, in trade worth 152 million baht. The SET yesterday put the XD sign on TTA, meaning shares are no longer eligible for dividends.
Source: Bangkok Post