Transocean Ltd. (NYSE: RIG) (“Transocean”) announced today that it
has executed privately negotiated exchange and purchase agreements
relating to certain of the 0.50% Exchangeable Senior Bonds due 2023
(the “Existing Exchangeable Bonds”) and certain of the 7.25% Senior
Notes due 2025 (the “2025 Priority Guaranteed Notes”) issued by
Transocean Inc., Transocean’s wholly-owned subsidiary. In
aggregate, these transactions provide Transocean with an
incremental $175 million in liquidity, further improving the
flexibility of the company’s balance sheet.
Pursuant to the exchange and purchase
agreements, Transocean Inc. agreed to exchange (a) approximately
$73.0 million aggregate principal amount of its Existing
Exchangeable Bonds for (i) approximately $73.0 million aggregate
principal amount of new 4.625% Senior Guaranteed Exchangeable Bonds
due 2029 (the “New Exchangeable Bonds”) to be issued by Transocean
Inc. and (ii) warrants (the “Warrants,” and together with the New
Exchangeable Bonds, the “Exchange Securities”) to subscribe for
Transocean shares, CHF 0.10 per share (the “Warrant Shares”), equal
to 31.5% of the aggregate number of Transocean shares underlying
such New Exchangeable Bonds, and (b) approximately $43.3 million
aggregate principal amount of its 2025 Priority Guaranteed Notes
for approximately $38.9 million aggregate principal amount of New
Exchangeable Bonds. In addition, pursuant to the exchange and
purchase agreements, Transocean Inc. agreed to sell approximately
$188.1 million aggregate principal amount of new and additional New
Exchangeable Bonds (the “Additional New Bonds”) and issue new and
additional Warrants (the “Additional New Warrants,” together with
the Additional New Bonds, the “Additional New Securities”) to
subscribe for Warrant Shares equal to 28.3% of the aggregate number
of Transocean shares underlying such New Exchangeable Bonds.
The New Exchangeable Bonds will be guaranteed by
Transocean and certain indirect holding company subsidiaries of
Transocean Inc.: Transocean Holdings 1 Limited (“Holdings 1”),
Transocean Holdings 2 Limited (“Holdings 2”) and Transocean
Holdings 3 Limited (“Holdings 3” and, together with Holdings 1 and
Holdings 2, the “Subsidiary Guarantors”).
The New Exchangeable Bonds will have an initial
exchange rate that implies an exchange price that is a 22.5%
premium to the volume weighted average price of Transocean shares
over the 10 trading day period following this announcement (the
“VWAP Price”). On or after March 30, 2026, Transocean Inc. may
redeem the New Exchangeable Bonds if the closing price of
Transocean’s shares has exceeded 115% of the exchange price for at
least 20 trading days in a consecutive 30-day trading period,
subject to a make-whole payment through March 30, 2028 for any
exchanges effectuated following such redemption. Each Warrant will
be exercisable for one Warrant Share at the election of the holder,
either in full or in part, at any time after the date of issuance
until 5:00 p.m., New York City time, on March 13, 2026 (the
“Expiration Time”), at an exercise price equal to a 32.25% premium
to the VWAP Price, subject to customary anti-dilution adjustments.
Transocean Inc., in its sole discretion, may elect to require the
Warrants to be exercised on a cash or cashless basis. If at any
time prior to the Expiration Time the closing sale price of
Transocean shares on the NYSE equals or exceeds $10.00 per share,
subject to adjustment in accordance with the warrant agreement
governing the Warrants, for a period of five consecutive trading
days, Transocean Inc. will have the right to effect an exercise of
all (and only all) of the Warrants upon notice to the holders of
the Warrants.
The transactions are expected to close on
September 30, 2022, subject to customary closing conditions.
Transocean intends to use the proceeds from the
sale of the Additional New Securities to repurchase approximately
$13.8 million in outstanding principal of the 2025 Priority
Guaranteed Notes for approximately $11.7 million plus accrued and
unpaid interest, and for general corporate purposes, which may
include the repurchase of additional debt securities of Transocean
Inc., capital expenditures and working capital.
As a result of the transactions contemplated by
the exchange and purchase agreements and after giving effect to the
expected use of proceeds described above, Transocean will have
outstanding $300.0 million aggregate principal amount of New
Exchangeable Bonds and Warrants to purchase an aggregate number of
Transocean shares equal to approximately 25.4% of the aggregate
number of shares underlying the New Exchangeable Bonds. In
addition, Transocean will have retired approximately $73.0 million
in outstanding principal of Existing Exchangeable Bonds and
approximately $57.1 million in outstanding principal of 2025
Priority Guaranteed Notes.
The Exchange Securities, Additional New
Securities and Transocean shares issuable upon exchange or exercise
of the Exchange Securities and Additional New Securities, as
applicable, have not been registered under the Securities Act of
1933, as amended, or under any state securities laws and may not be
offered or sold without registration under, or an applicable
exemption from, the registration requirements. This press release
does not constitute an offer to sell or a solicitation of an offer
to buy, nor shall there be any sale of these securities in any
state or jurisdiction in which such an offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such state or jurisdiction.
About Transocean
Transocean is a leading international provider of offshore
contract drilling services for oil and gas wells. The company
specializes in technically demanding sectors of the global offshore
drilling business with a particular focus on deepwater and harsh
environment drilling services, and believes that it operates the
highest specification floating offshore drilling fleet in the
world.
Transocean owns or has partial ownership interests in, and
operates a fleet of 37 mobile offshore drilling units,
consisting of 27 ultra-deepwater floaters and 10 harsh
environment floaters. In addition, Transocean is constructing
two ultra-deepwater drillships.
For more information about Transocean, please visit:
www.deepwater.com.
Forward-Looking Statements
The statements described herein that are not historical facts
are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements could
contain words such as "possible," "intend," "will," "if," "expect,"
or other similar expressions. Forward-looking statements are based
on management’s current expectations and assumptions, and are
subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict. As a result, actual
results could differ materially from those indicated in these
forward-looking statements. Factors that could cause actual results
to differ materially include, but are not limited to, estimated
duration of customer contracts, contract dayrate amounts, future
contract commencement dates and locations, planned shipyard
projects and other out-of-service time, sales of drilling units,
timing of the company’s newbuild deliveries, operating hazards and
delays, risks associated with international operations, actions by
customers and other third parties, the fluctuation of current and
future prices of oil and gas, the global and regional supply and
demand for oil and gas, the intention to scrap certain drilling
rigs, the success of our business following prior acquisitions, the
effects of the spread of and mitigation efforts by governments,
businesses and individuals related to contagious illnesses, such as
COVID-19, and other factors, including those and other risks
discussed in the company's most recent Annual Report on Form 10-K
for the year ended December 31, 2021, and in the company's
other filings with the SEC, which are available free of charge
on the SEC's website at: www.sec.gov. Should one or
more of these risks or uncertainties materialize (or the other
consequences of such a development worsen), or should underlying
assumptions prove incorrect, actual results may vary materially
from those indicated or expressed or implied by such
forward-looking statements. All subsequent written and oral
forward-looking statements attributable to the company or to
persons acting on our behalf are expressly qualified in their
entirety by reference to these risks and uncertainties. You should
not place undue reliance on forward-looking statements. Each
forward-looking statement speaks only as of the date of the
particular statement, and we undertake no obligation to publicly
update or revise any forward-looking statements to reflect events
or circumstances that occur, or which we become aware of, after the
date hereof, except as otherwise may be required by law. All
non-GAAP financial measure reconciliations to the most comparative
GAAP measure are displayed in quantitative schedules on the
company’s website at: www.deepwater.com.
This press release, or referenced documents, do not constitute
an offer to sell, or a solicitation of an offer to buy, any
securities, and do not constitute an offering prospectus within the
meaning of the Swiss Financial Services Act (“FinSA”) or
advertising within the meaning of the FinSA. Investors must rely on
their own evaluation of Transocean and its securities, including
the merits and risks involved. Nothing contained herein is, or
shall be relied on as, a promise or representation as to the future
performance of Transocean.
Analyst Contact:Alison
Johnson+1 713-232-7214
Media Contact:Pam Easton+1
713-232-7647
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