Seadrill sells SapuraKencana stake, raises $300M in proceeds

Seadrill (SDRL -0.7%) says it has sold 230M shares of Malaysian oil services company SapuraKencana, raising $300M in proceeds, with $165M in total economic gain realized from the sale.

SDRL will continue to own ~490M shares, representing a ~8% ownership stake in SapuraKencana, and has entered into a lock-up agreement for the remaining shares until the end of 2014.

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Comments (11)
  • saratogahawk
    , contributor
    Comments (2538) | Send Message
    $165 million gain. I am good with this. They retain a significant position and can use the $300 million to clean up the balance sheet a little.
    9 Apr 2014, 10:38 AM Reply Like
  • Debutant
    , contributor
    Comments (2939) | Send Message
    $165 million gain in a $300 million sale while still keeping 8% in SapuraKencana and maintaining very good cooperation with them for future business opportunities tell us that we are invested in a highly profitable SDRL, as if we didn't know it already.
    9 Apr 2014, 10:53 AM Reply Like
  • saratogahawk
    , contributor
    Comments (2538) | Send Message
    Deb great minds think alike. Have a great and profitable day.
    9 Apr 2014, 11:08 AM Reply Like
  • James_B
    , contributor
    Comments (235) | Send Message
    I agree, saratogahawk, cash is king and $300MM in cash can go a long ways. I'm surprised SDRL is down today after this announcement, 81% gain on investment (a large investment) should be, imo, significant news.
    9 Apr 2014, 11:13 AM Reply Like
  • murray555
    , contributor
    Comments (432) | Send Message
    Fortunately for us reality doesn't play a role in most investors plans. I love it when the stocks I like go on sale so I can pick up more at a bargain price.
    9 Apr 2014, 11:34 AM Reply Like
  • financeminister
    , contributor
    Comments (1229) | Send Message
    Trying to play devil's advocate for a second... do we know why they sold? were they desperate for cash or something?


    Long SDRL
    9 Apr 2014, 12:15 PM Reply Like
  • Debutant
    , contributor
    Comments (2939) | Send Message
    "Desperate for cash" would have sold the remaining 8% as well. Instead, SDRL chose to keep it. With the sale yesterday SDRL did some profit taking, that's all.


    Note to myself: $165 million gain in a $300m sale is a lot more than "some" profit.
    10 Apr 2014, 04:16 AM Reply Like
  • saratogahawk
    , contributor
    Comments (2538) | Send Message
    I don't know for certain but I vaguely remember them discussing a sale of some portion of Sapura in an earlier conference call. I could be mistaken or forgetful so don't bank on this. Since they retain a large chunk of Sapura anyway they still have the ability to influence Sapura decisions.
    9 Apr 2014, 12:18 PM Reply Like
  • Not_Quite_Pheidippides
    , contributor
    Comments (411) | Send Message
    Since the tender rig deal (Nov. 2012 was the first announcement), SapuraKencana is up over 1/3 (from about 3 to well over 4 [ringitt? Looking at yahoo finance] -- depends on the exact timing of the sale). In net, then, the value of their SK stock is now roughly the same. So, they're A) profit taking, B) keeping the value of their investment in SK proportional, and C) getting cash for ???...
    9 Apr 2014, 12:33 PM Reply Like
  • Budavar
    , contributor
    Comments (1412) | Send Message
    It is sad to see = even good news bring declines in SDRL's share price.
    This happened several times recently.
    We had superb news about a joint venture with Mexican partners.
    Ditto with the leasing of several fleet units.
    Ditto to-day.
    Why the swoons?


    Many investors are just fed up with JF's manic obsession for a 100% pay out ratio
    creating a high yield which alarms many as high yield is often associated (at least in America) with JUNK status.


    Can SDRL sink any lower?
    9 Apr 2014, 12:44 PM Reply Like
  • The Rebel
    , contributor
    Comments (2849) | Send Message
    Certainly not any lower than your incessant attempts to drag JF and SDRL into the sewer.
    9 Apr 2014, 02:00 PM Reply Like
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