March 1, 2012 / 8:51 AM / 6 years ago

UPDATE 1-Shipping magnate Fredriksen sells $1 bln Seadrill shares

* Fredriksen cuts stake to 23% from 28%, raises $1 bln

* Holds options to buy back stake

* To use cash for expansion in shipping

* Shares drop nearly 2 percent

(Rewrites first paragraph with completion of sale, adds detail, shares)

OSLO, March 1 (Reuters) - Norwegian-born shipping magnate John Fredriksen sold nearly a fifth of his stake in drilling firm Seadrill Ltd (SDRL.OL) for about $1 billion, giving him the cash to “aggressively” invest in commodity shipping, the firm said on Thursday.

Fredriksen, who will remain the biggest shareholder in Seadrill, the world’s biggest drilling firm by market capitalisation, wants to use the cash to invest in commodity shipping at a time when the sector is struggling with depressed asset values due to weak demand and an oversupply of vessels.

Seadrill said the stake had represented a disproportionately large part of Fredriksen’s investment portfolio, at approximately 63 percent by value of the listed company stakes controlled by his investment vehicle Hemen.

The firm added that Fredriksen holds options to lift its stake back up to 28 percent.

Seadrill shares dropped on Fredriksen’s announcement and traded 1.9 percent lower at 0822 GMT.

“The transaction will also create liquidity to aggressively pursue investment opportunities in the currently oversupplied market for commodity shipping,” it said.

“Such opportunities include buying distressed asset companies, ordering new buildings and seek opportunities for consolidation.”

Fredriksen is the top owner of oil shipper Frontline (FRO.OL), dry bulk firm Golden Ocean GOGL.OL and LNG shipper Golar GOL.OL(GLNG.O).

(Reporting by Balazs Koranyi; Editing by David Holmes)

((Balazs.Koranyi@thomsonreuters.com)(+47 22 93 69 62)) Keywords: SEADRILL/

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