Seadrill Limited (NYSE & OSE: SDRL) has announced that it has completed its acquisition of Aquadrill LLC.
After completion, Aquadrill became a wholly owned subsidiary of Seadrill, the company noted. In connection with the completion of the agreement, Seadrill issued an aggregate of 29,866,505 shares of common stock to former Aquadrill shareholders and holders of equity awards, resulting in an issued share capital of $798,665.03, divided in a total of 79,866,503 Seadrill common shares, each with a par value of $01. , Seadrill noted.
Seadrill said it will continue to be based in Hamilton, Bermuda, and confirmed that Julie Robertson and Simon Johnson will continue in their respective roles as Chairman of the Board of Directors and President and CEO. Following the completion of the deal, Harry Quarls and Jonathan Swinney were appointed to two new positions on Seadrill’s board of directors which were approved at Seadrill’s annual general meeting of shareholders on March 21, 2023, explained the company.
Seadrill noted that it will continue to trade on the New York Stock Exchange and the main list of the Oslo Stock Exchange under the ticker ‘SDRL’.
The combination of Seadrill and Aquadrill creates an industry-leading offshore drilling company with a modern, high-specification fleet, according to Seadrill, which noted that the combined company will have a streamlined cost structure and be well positioned for further growth “given its stronger credit and liquidity profile, providing attractive cash flows”.
Seadrill said the company will be in a strong position to serve a wider range of customers, “with one of the youngest and most technologically advanced fleets in the industry, and a combined portfolio of $2.6 billion”. He highlighted that the combined company will have 12 floats, three hard environment rigs, four benign jack-ups and three tender assisted rigs. In addition, seven rigs will be managed under strategic partnerships, Seadrill noted.
The company will also have a diversified portfolio of contract coverage, will be positioned to rapidly integrate and achieve identified and achievable synergies of at least $70 million per year under execution, and should benefit from a profile of improved cash flow and a strengthened balance sheet. , according to Seadrill.
“We are delighted to have completed the acquisition of Aquadrill, welcoming its fleet to the Seadrill family,” Seadrill President and CEO Simon Johnson said in a company statement.
“The management team is focused on efficiently and quickly integrating the two companies in order to realize the synergies derived from the transaction,” he added.
“[This] it is a crucial milestone for our company and we strongly believe that we are well positioned for the betterment of this industry. We remain optimistic about the continued development of the platform market and our ability to deliver more value to our shareholders,” he continued.
Definitive merger agreement
In December 2022, Seadrill and Aquadrill announced that they had entered into a definitive merger agreement, under which Seadrill would acquire Aquadrill in an all-stock transaction. In that announcement, it was disclosed that upon completion of the transaction, Seadrill shareholders and Aquadrill units would own 62 percent and 38 percent, respectively, of the combined company’s outstanding common stock.
The announcement highlighted that the transaction valued Aquadrill at an implied equity value of approximately $958 million, based on Seadrill’s 30-day volume-weighted average price on the NYSE of $31.25 on Dec. 22 2022.
Commenting on the transaction at the time, Johnson said: “Seadrill and Aquadrill have a long and rich history of strategic and operational management.”
“Our shared heritage will promote an efficient integration of the two companies. I look forward to welcoming the Aquadrill fleet back to the Seadrill family.”
Steven Newman, CEO of Aquadrill, said in this announcement, “we believe this combination will create maximum value for our shareholders and create an excellent platform to provide high-quality service to our customers.”
Chapter 11 Apparition
In February 2022, Seadrill announced that it had emerged from Chapter 11 “after successfully completing its reorganization pursuant to its Chapter 11 plan of reorganization.”
The company, which noted that the plan was confirmed by the United States Bankruptcy Court for the Southern District of Texas on October 26, 2021, said the restructuring significantly reduced its balance sheet by adding about $4.9 billion of secured bank debt that it previously held in twelve silos. “resulting in a streamlined capital structure with a single collateral silo.”
Seadrill also noted that it raised $350 million in new financing under the plan and said that its streamlined capital structure and “substantial liquidity raised under the plan” provided the company ” a secure base to pursue opportunities in the offshore drilling industry and grow value.” for their interest groups”.
Stuart Jackson, Seadrill’s CEO at the time, said: “Our emergence from Chapter 11 concludes the realignment of our balance sheet.”
“I am grateful to all our employees, customers, partners, suppliers, creditors and shareholders for their support during this long process,” he added.
“Our restructured balance sheet provides us with greater liquidity and lower debt leverage. With this firm financial foundation in place and the market recovery well underway, Seadrill will focus on disciplined capital investment, cost containment and risk management contract to maintain its position as a leader in industry reshaping,” continued Jackson.
On March 24, Seadrill announced the appointment of Simon Johnson as President and CEO. Johnson replaced Jackson effective immediately, a company statement revealed at the time.
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