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Seadrill Seeks 50.1% of Sevan Drilling to Nix Funding Plans

Seadrill Ltd., an offshore driller controlled by billionaire John Fredriksen, is seeking to buy 50.1 percent of Sevan Drilling ASA to nix financing plans for the target that it says would destroy shareholder value.

The company, based in Hamilton, Bermuda, hired DNB Markets to look to purchase as many as 116.9 million shares in Sevan at 3.95 kroner a share, it said in a statement. The company today increased its stake in Sevan, an operator of deep-water drilling rigs, to 30.4 percent, it said in a separate statement.

The operator, which owns two ultra-deepwater drilling units and has two more being built, said June 19 it agreed terms on a $1.45 billion, five-year bank facility. Together with a $500 million bond issue, the money would give the Oslo-based company enough cash to pay for the completion and mobilisation of two new units, due for delivery in September 2013 and April 2014.

The funding proposal as it stands “is value destructive,” Seadrill said today. “Subject to completion of the proposed share purchase, Seadrill will seek to propose an alternative and improved financing structure.”

Seadrill, the largest owner of ultra-deepwater drilling rigs after Vernier, Switzerland-based Transocean Ltd., is expanding its fleet in anticipation of rising demand from oil companies that are extending the search for oil and gas reserves into deeper and harder-to-access parts of the world.

If Seadrill is successful in buying 50.1 percent, it will call an extraordinary meeting of the company’s shareholders to propose a new board and offer to take over management of it rigs, the driller said. If it’s unable to buy the stake, Seadrill will consider selling its shares, it said.

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