RIG) announced that the company has reached definitive agreements to sell 38 shallow water drilling rigs to Shelf Drilling International Holdings, Ltd. ("Shelf Drilling") for approximately $1.05 billion. The list of rigs to be acquired by Shelf Drilling in the transactions is provided as Appendix A. Shelf Drilling is a newly formed company sponsored equally by Castle Harlan, Inc., CHAMP Private Equity and Lime Rock Partners.
The sales price includes approximately $855 million in cash, subject
to working capital and other closing adjustments, and $195 million in
seller financing. Seller financing will be in the form of preference
shares issued by an affiliate of Shelf Drilling. As a component of the
agreement, Transocean will provide various transition support services
to Shelf Drilling for a period subsequent to the closing of the
transactions. The transactions are expected to close in the fourth
quarter of 2012, subject to certain conditions.
"This agreement marks an important milestone in our asset strategy to
increase our focus on high-specification floaters and jack ups,
improving our long-term competitiveness," said Steven L. Newman,
President and Chief Executive Officer of Transocean Ltd.
David Mullen, President and Chief Executive Officer of Shelf
Drilling, added, "This is an exciting opportunity with great potential.
Our strategy will be to maintain an exclusive focus on shallow water
drilling, leveraging decades of complementary industry experience of
management, three leading investment firms, and our employees, to
provide best in class drilling operations for our customers."
Related to the Shelf Drilling transactions, Transocean expects its
third quarter 2012 results to include a non-cash charge related to
impairment of the long-lived assets or goodwill allocable to these
assets. As of June 30, 2012, the aggregate carrying amount of the
long-lived assets included in the transactions was approximately $1.4
billion. The sales price includes approximately $200 million related to
the net current assets associated with the transactions. Transocean's
total aggregate consolidated goodwill as of June 30, 2012 was $3.1
billion, a portion of which is expected to be allocated to the assets
included in the transactions.
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