LONDON, Nov. 12, 2019 /PRNewswire/ -- Valaris plc
(NYSE: VAL) ("Valaris" or the "Company") today announced a Board
refreshment program, enhancements to the Company's corporate
governance and a new $100 million
cost reduction plan.
Carl G. Trowell, Executive
Chairman of the Board of Directors, said, "Since the completion of
the merger of Rowan and Ensco in April of 2019, the Board has been
focused on implementing best-in-class corporate governance
practices that align with the execution of Valaris' long-term
strategy, reflecting the input we have received from our
broad-based shareholder engagement program and underscoring our
commitment to enhancing value for all our investors."
Board Refreshment Program and Governance Enhancements
The Board has appointed Georges J.
Lambert as a new independent director, effective
immediately. Additionally, current Valaris directors, C.
Christopher Gaut and J. Roderick Clark, are retiring from the Board,
effective immediately, and a third director will not stand for
re-election at the 2020 Annual General Meeting of Shareholders
("Annual General Meeting").
Underscoring the Company's commitment to ongoing refreshment,
Valaris has engaged Egon Zehnder, an
internationally recognized independent search firm, to assist with
the Board's search for a second new, independent director with
significant capital markets experience. With these changes, the
Valaris Board will be reduced to 10 directors following the Annual
General Meeting. Further, upon the conclusion of Mr. Trowell's term
as Executive Chairman, which expires in October of 2020, the Board
will appoint an independent Chairman.
As previously disclosed on the Company's third quarter earnings
call, the Board has formed a Finance Committee to assist in its
oversight of the Company's capital structure and financial
strategies. Mr. Lambert will become a member of the Finance
Committee in conjunction with his appointment to the Board.
Prior to his appointment to the Board, Mr. Lambert spent more
than 20 years as an investment professional. Most recently, he was
a Partner and Senior Vice President for The Capital Group, where he
served in various capacities as a portfolio manager and equity
analyst across multiple sectors including energy services and
shipping. In addition, Mr. Lambert has significant corporate
governance experience having been the investment representative for
Capital International's governance and stewardship engagements for
several years.
William E. Albrecht, Independent
Lead Director of the Board, said, "We are pleased to immediately
add Georges to the Valaris Board. He brings a unique shareholder
perspective from his tenure at The Capital Group, as well as deep
corporate governance expertise. I would also like to express our
sincere gratitude to Cris and Rod for their many valuable
contributions, both before and after the completion of the
merger."
Synergy Realization and Further Cost Reductions
In addition to the Company's focus on proactive balance sheet
management and winning new contracts for its rig fleet, Valaris has
made significant progress on its integration. As of September 30, 2019, the Company reached
annualized run rate synergies of approximately $115 million and is on-track to realize its
previously announced target of $165
million by the end of 2020.
In addition, Valaris today announced that it is targeting at
least $100 million of incremental
annual operating cost savings, which are expected to benefit the
Company's annual free cash flow by reducing operating expenses.
Thomas Burke, President and Chief
Executive Officer, said, "The synergies we have achieved to date
have come primarily from onshore corporate and operations support.
Recently, we have expanded our focus to optimizing all areas of
cost within the business. Accordingly, while we continue to realize
the benefits of the merger, we are focused on achieving even
greater efficiencies across our operations and expect to provide
more details on these cost savings initiatives before the end of
the year. In the interim, we will continue to leverage our scale to
create additional value, while also maintaining our focus on
operational excellence.
"Valaris remains uniquely well positioned amongst its peers for
the anticipated market recovery. Our Board and management fully
recognize the continued pressures in the current market environment
and remain focused on the delivery of both merger and additional
cost savings, as well as optimizing our capital structure. We will
continue to take actions to maintain our position as the leading
offshore driller."
Engagement with Luminus Management
Over the past several months, Valaris has been engaged in
discussions with representatives of Luminus Management, LLC
("Luminus") regarding, among other things, Luminus' views on return
of capital and Board composition. In connection with such
discussions, on September 5, 2019 the
Company and Luminus entered into an agreement (the "Agreement")
whereby the Company and Luminus each agreed to certain restrictions
on their activities while the parties worked to negotiate a longer
term settlement agreement.
The parties were unable to reach a mutually satisfactory
agreement and the restrictions under the Agreement expired on
November 11, 2019, subject to certain
agreed upon restrictions which survive for an additional 15
business days. While the parties were unable to reach a formal
agreement, the Board and executive team remain committed to
engaging with shareholders to identify and execute on opportunities
to drive value. The Company looks forward to continued constructive
dialogue with Luminus and its broader shareholder base.
About Valaris plc
Valaris plc (NYSE: VAL) is the industry leader in offshore
drilling services across all water depths and geographies.
Operating a high-quality rig fleet of ultra-deepwater drillships,
versatile semisubmersibles and modern shallow-water jackups,
Valaris has experience operating in nearly every major offshore
basin. With an unwavering commitment to safety and operational
excellence, and a focus on technology and innovation, Valaris was
rated first in total customer satisfaction in the latest
independent survey by EnergyPoint Research - the ninth consecutive
year that the Company has earned this distinction. Valaris plc is
an English limited company (England No. 7023598) with its corporate
headquarters located at 6 Chesterfield Gardens, London W1J 5BQ. To learn more, visit our
website at www.valaris.com.
Forward-Looking Statements
Statements contained in this press release 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.
Forward-looking statements include words or phrases such as
"anticipate," "believe," "estimate," "expect," "intend," "plan,"
"project," "could," "may," "might," "should," "will" and similar
words and specifically include statements involving synergies and
future cost savings; anticipated benefits, opportunities and
effects of the merger between Ensco and Rowan; expected financial
performance; optimization of capital structure; and general market,
business and industry conditions, trends and outlook. The
forward-looking statements contained in this press release are
subject to numerous risks, uncertainties and assumptions that may
cause actual results to vary materially from those indicated,
including actions by regulatory authorities, rating agencies or
other third parties; actions by our security holders; costs and
difficulties related to the integration of Ensco and Rowan and the
related impact on our financial results and performance; our
ability to repay debt and the timing thereof; availability and
terms of any financing; commodity price fluctuations, customer
demand, new rig supply, downtime and other risks associated with
offshore rig operations, relocations, severe weather or hurricanes;
changes in worldwide rig supply and demand, competition and
technology; future levels of offshore drilling activity;
governmental action, civil unrest and political and economic
uncertainties; terrorism, piracy and military action; risks
inherent to shipyard rig construction, repair, maintenance or
enhancement; possible cancellation, suspension or termination of
drilling contracts as a result of mechanical difficulties,
performance, customer finances, the decline or the perceived risk
of a further decline in oil and/or natural gas prices, or other
reasons, including terminations for convenience (without cause);
our ability to enter into, and the terms of, future drilling
contracts; any failure to execute definitive contracts following
announcements of letters of intent, letters of award or other
expected work commitments; the outcome of litigation, legal
proceedings, investigations or other claims or contract disputes;
governmental regulatory, legislative and permitting requirements
affecting drilling operations; our ability to attract and retain
skilled personnel on commercially reasonable terms; environmental
or other liabilities, risks or losses; debt restrictions that may
limit our liquidity and flexibility; and cybersecurity risks and
threats. In addition to the numerous factors described above, you
should also carefully read and consider "Item 1A. Risk Factors" in
Part I and "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations" in Part II of our
most recent annual report on Form 10-K, as updated in our
subsequent quarterly reports on Form 10-Q, which are available on
the SEC's website at www.sec.gov or on the Investor Relations
section of our website at www.valaris.com. 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, except as required
by law.
Important Additional Information and Where to Find It
If Luminus Management, LLC or one of its affiliates, and/or one
or more other shareholders collectively owning 5% or more of the
Company's outstanding shares, requisitions a general meeting of
shareholders (the "General Meeting"), the Company will file a proxy
statement (the "Proxy Statement") with the SEC in connection with
the solicitation of proxies for such General Meeting, together with
a WHITE proxy card. SHAREHOLDERS ARE URGED TO READ THE PROXY
STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY
OTHER RELEVANT DOCUMENTS THAT THE COMPANY WILL FILE WITH THE SEC
CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION.
Shareholders will be able to obtain, free of charge, copies of
the Proxy Statement, any amendments or supplements thereto and any
other documents (including the WHITE proxy card) when filed by the
Company with the SEC in connection with the General Meeting at the
SEC's website (http://www.sec.gov), at the Company's website
(https://www.valaris.com/investors/financials/sec-filings/default.aspx)
or by contacting Investor Relations by phone at +1-713-789-1400, by
email at ir.hdqrs@valaris.com or by mail at Valaris plc, Attention:
Investor Relations, 5847 San Felipe, Suite 3300, Houston, Texas 77057.
Participants in the Solicitation
The Company, its directors and certain of its executive officers
and other employees may be deemed to be participants in the
solicitation of proxies from shareholders in connection with the
General Meeting. Additional information regarding the identity of
these potential participants, none of whom owns in excess of one
percent of the Company's shares, and their direct or indirect
interests, by security holdings or otherwise, will be set forth in
the Proxy Statement and other materials to be filed with the SEC in
connection with the General Meeting. Information relating to the
foregoing can also be found in the Company's definitive proxy
statement for its 2019 annual general meeting of shareholders (the
"2019 Proxy Statement"), filed with the SEC on March 29, 2019. To the extent holdings of the
Company's securities by such potential participants (or the
identity of such participants) have changed since the information
printed in the 2019 Proxy Statement, such information has been or
will be reflected on statements of changes in beneficial ownership
on Forms 4 and 5 filed with the SEC. You may obtain free copies of
these documents using the sources indicated above.
Investor & Media Contacts:
Nick Georgas
Senior Director – Investor Relations and Communications
+1-713-430-4607
Tim Richardson
Manager – Investor Relations
+1-713-430-4490
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SOURCE Valaris plc