Seadrill ($20.75) sells/leases back rigs, sets dividend
Tue Sep 16, 2008 3:03am EDT
OSLO, Sept 16 (Reuters) - Norway's offshore services group SeaDrill (SDRL.OL: Quote, Profile, Research, Stock Buzz) said:
* It has agreed with Ship Finance International (SFL.N: Quote, Profile, Research, Stock Buzz) a combined sale and leaseback arrangement, whereby Seadrill sells its ultra-deepwater semi-submersible rigs West Hercules and West Taurus for $1.7 billion and simultaneously leases the units for a 15-year period.
* The up front cash contribution from the sale, adjusted for remaining newbuild instalments, is estimated at $1 billion at delivery of the two semi-submersible rigs.
* It has with this lease arrangement, in combination with future cashflow generation, secured necessary financing of the entire newbuild programme.
* The sale and leaseback transaction is an important step in realizing Seadrill's leveraged financing strategy and decided to distribute an extraordinary cash dividend of $0.30 per share. Seadrill shares will trade ex-dividend on Sept. 22, 2008.
* If it applied similar arrangements for all the remaining eight deepwater units, Seadrill could release cash in excess of $5 billion. This is however dependent on availability of debt financing sources and relevant covenant structures. (Reporting by Wojciech Moskwa)
