Seadrill Cancels Convertible Bond Issuance, Stock Up

(RTTNews) - Seadrill Limited (SDRL), an offshore drilling contractor, Wednesday said it has decided to cancel the planned $1 billion 2019 maturity convertible bond issuance due to the share price development on the day of issuance.

Although the order book was covered, the adverse price movement led to an unattractive conversion price for the issue.

Consequently, Seadrill will refuse to accept any Acceptance Forms delivered in connection with the voluntary incentive payment offer to convert the existing 3.375 percent $650 million Seadrill convertible bonds due in 2017.

According to the company, following numerous successful transactions, the Seadrill Group will have a cash balance of around $1.5 billion by the end of July.

Considering this strong liquidity position, the company did not view this transaction as a requirement, but rather as an opportunity.

The company had announced Tuesday morning that it intends to issue $1 billion in principal amount of convertible bonds with a five-year tenor. The bonds were to be convertible into common shares of the company.

The stock fell 5.2 percent on Tuesday on the NYSE at $37.53, but is up 4.1 percent in pre-market activity today.

Meanwhile, in Oslo, the stock is gaining 3.8 percent and is at 241.60 Norwegian kroner.