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Last Update: 10-Sep-12 09:14 ET
Transocean shares rise 1% following agreements to sell rigs for $1.05 billion
Transocean (RIG $48.06 +0.67) announced that the company has reached definitive agreements to sell 38 shallow water drilling rigs to Shelf Drilling International Holdings for approxmately $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, CHAMP Private Equity and Lime Rock Partners. The sales price includes approxmately $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. Related to the Shelf Drilling transactions, RIG 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 approxmately $1.4 billion. The sales price includes approxmately $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.
