Billionaire Fredriksen Raises Fresh Cash for New Rig Company

Updated on
  • Northern Drilling raises $250 million in private placement
  • Fredriksen is doubling down on offshore drilling amid slump

The West Phoenix oil platform, operated by Seadrill Norge AS, centre, stands with another unused platform in the Port of Cromarty Firth in Cromarty, U.K.

Photographer: Matthew Lloyd

Northern Drilling Ltd., a company set up by billionaire John Fredriksen to buy offshore drilling rigs on the cheap, raised 2.03 billion kroner ($250 million) in a private placement to expand its fleet.

The company said on Friday it sold 31.8 million new shares at 64 kroner apiece, equal to the stock’s closing price on the Oslo Axess market a day earlier. Fredriksen bought 8.3 million shares in the placement through Hemen Holdings Ltd. Overall, his stake in the company will fall to 40.2 percent from 50 percent.

Northern Drilling plans to use the money for “further fleet expansion.” The company has already bought one semi-submersible rig for $365 million, and has an option to acquire another, for $400 million. The option on the second rig is due to lapse at the end of the year. The company had already raised $230 million in an initial private placement.

Fredriksen is doubling down on offshore drilling rigs after the worst market slump in a generation pushed Seadrill Ltd. -- once the flagship business in his industrial empire -- into bankruptcy protection. The shipping tycoon is taking the lead in a proposed $1 billion investment in Seadrill’s restructuring, and is hunting for cheap or distressed rigs with Northern Drilling, which was founded earlier this year.

Northern Drilling has since March looked at more than 75 different rigs and considered two dozen potential deals with a value of as much as $2 billion, the company said at a presentation in September.

Pareto Securities AS, Fearnley Securities AS, Nordea Bank AB and Carnegie AS acted as managers in the private placement.

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