June 12, 2018 / 2:27 PM / a month ago

Shelf Drilling plans to expand its rig fleet after Oslo IPO

OSLO, June 12 (Reuters) - Shelf Drilling, the world’s largest contractor of shallow water rigs, plans to add one or two premium rigs to its fleet after announcing plans for an initial public offering on the Oslo bourse, the firm said on Tuesday.

The Dubai-headquartered company plans to raise $200-250 million via a new offer, pricing its new shares at $8-9 per share. Its shares last traded at 70 Norwegian crowns ($8.75) on the Oslo over-the-counter exchange on Monday.

The company said it would use about $175 million to redeem all of its preferred shares and accrued, but unpaid dividend, and in addition plans to acquire one or two premium jack-ups to add to its fleet of 38 units.

Demand for jack-up rigs, which stand on the seabed, has been steadily growing through 2017 after hitting at the end of 2016 the lowest levels since mid-2000s, Shelf Drilling said in an investor presentation in March.

Shelf Drilling competes with such companies as Ensco , Rowan, Seadrill, Borr Drilling and Paragon, which was acquired by Borr Drilling earlier this year.

Private-equity firms - Lime Rock Partners, Castle Harlan and CHAMP - held more than 60 percent of the company’s shares as of March, while investors on Oslo’s over-the-counter exchange held 33.8 percent.

The company said it expected to have between 47.8-51.9 percent and 51-56 percent of its shares in the free float after completion of the IPO, depending on the use of over-allotment option.

DNB Markets and Clarksons Platou Securities are joint bookrunners, while Arctic Securities AS and SpareBank 1 Markets are co-managers in the offering.

Shelf Drilling said it expected its shares to start trading on the Oslo Exchange on or around June 25. ($1 = 8.0007 Norwegian crowns) (Reporting by Nerijus Adomaitis; Editing by Adrian Croft)

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