SapuraKencana shareholders set to approve Seadrill rig segment deal

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FIRST OF ITS KIND: With the completion of the deal, SapuraKencana will become the world leader in the tender rig segment – the first time a Malaysian company has reached such a status.

KUALA LUMPUR: Shareholders of SapuraKencana Petroleum Bhd (SapuraKencana) are expected to approve its acquisition of the entire tender rig segment belonging to Seadrill, the leading Norwegian global drilling company, at the upcoming extraordinary general meeting on April 23, analysts say.

In what was surely a strategic acquisition that would position it as a world leader for tender rigs, they saw no problem in getting shareholders approval, given the solid shareholding by owners and friendly parties.

The significance of this EGM was that it would be a watershed meeting for the company, the analysts said.

Shareholders’ approval for the deal meant that the merger and acquisition  exercise would become formalised and final.

In effect, it meant the deal was done and the only remaining formalities were the transfer of monies and paperwork.

Analysts said that as such, this massive deal worth US$2.9 billion would have been completed in a record six months or so.

The loan financing was in place and there is also a share issuance to satisfy the deal.

With the completion of the deal, SapuraKencana would become the world leader in the tender rig segment – the first time a Malaysian company has reached such a status.

Tender rigs are used in drilling up to a depth of 6,500 feet.

The deal enables one representative from Seadrill to sit on the SapuraKencana board, bringing on a wealth of international experience, expertise and market connections.

Under the deal, Seadrill’s stake in SapuraKencana will rise to 12.5 per cent from 6.4 per cent.

The two companies won a Brazilian pipe laying vessel deal for US$1.4 billion and are awaiting results for another similar tender in Brazil.

Now SapuraKencana can go into new markets such as in Africa and Mexico, armed with their tender rigs.

The work force will also expand to about 10,000. Since the deal was announced, the company’s share price has been rising with research houses clearly denoting it as a ‘buy’ stock.

Against such a backdrop, shareholders would be eager to close the deal quickly and get on with what is surely a lucrative global business venture. — Bernama