Transocean to sell two semisubmersible rigs to Northern Offshore
Transocean Inc. (NYSE:RIG) today announced that certain of its subsidiaries have entered into agreements to sell the GSF Arctic II and GSF Arctic IV semisubmersible rigs to Northern Offshore, Ltd. (Oslo:NOF.OL) for total proceeds of approximately $750 million. The divestitures will complete Transocean's previously announced undertakings to the Office of Fair Trading in the United Kingdom (OFT) related to the merger with GlobalSantaFe Corporation.
The sale of the GSF Arctic IV is expected to close late in the third quarter of 2008, and the sale of the GSF Arctic II is expected to close in the fourth quarter of 2008 following completion of existing contract commitments. Under the purchase and sale agreements, the Transocean subsidiaries will provide seller financing for $745 million of the purchase price until December 31, 2010 at an annual interest rate of 10 percent. The financing will be secured by the GSF Arctic II and GSF Arctic IV.
Upon the closing of the GSF Arctic IV sale, Transocean will bareboat charter the unit back from the buyer at a rate of $180,000 per day for the duration of the rig's contract with Shell, which is expected to end in the fourth quarter of 2010. During the bareboat charter term, Transocean will receive the contracted dayrate from the customer but will also be responsible for the rig's normal operating expenses. A payment from the buyer of $180,000 per day will be made and applied to the interest and principal of the seller financing.
Commencing one month after closing of the GSF Arctic II sale, Transocean will receive principal and interest payments of $200,000 per day for the rig from the buyer.
Simmons & Company International served as financial advisor to Transocean in the transaction.
The GSF Arctic II and GSF Arctic IV are third-generation Friede & Goldman Enhanced Pacesetter design semisubmersible rigs, capable of operating in up to 1,200 feet of water and 1,500 feet of water, respectively.
