Transocean has secured a $750 million financing facility to prepare for the finalization of the $5.8 billion acquisition of Valaris. This financial facility is particularly aimed at strengthening the financial resources of this drilling company among its competitors.
Details of the Financial Facility
This facility, obtained through Transocean's wholly-owned subsidiary, Transocean International, includes a modified and amended credit agreement with Citibank and a group of lenders. This facility will come into effect after the completion of the Valaris acquisition and the fulfillment of customary conditions. The available credit has increased from $510 million to $750 million, and its maturity date has been extended from June 2028 to October 2031. Transocean has stated that this facility has received overwhelming interest during the financing process.
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Debt Repayment and Company Merger
The company has also settled $165 million of its 8% bonds related to Deepwater Aquila. This debt was paid on October 1 using liquidity and resources available in the debt service reserve account, and Transocean estimates that this action could lead to operational cost savings of approximately $22 million.
The merger of these two companies, agreed upon in February, allows Valaris shareholders to receive 15.235 shares of Transocean for each of their shares. Thus, Transocean shareholders will hold about 53% of the combined company, while Valaris shareholders will own 47%.
The enlarged drilling company will have a value of approximately $17 billion and a fleet consisting of 73 drilling rigs, including 33 ultra-deepwater drillships, nine semi-submersibles, and 31 jack-up rigs. This merger was authorized after clearing a major hurdle in the United States at the end of September when the Department of Justice concluded its antitrust investigation.
Brazil has now also granted approval for this transaction. The competition regulatory body in Brazil, CADE, on Tuesday issued a decision allowing this merger to proceed without any restrictions. The two companies are still aiming to finalize this merger in the fourth quarter of this year, depending on final conditions and shareholder approval.
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