Transocean issues $853.8 million exchangeables for Songa shares, debt

By Wendy Van Sickle

Columbus, Ohio, Jan. 30 – Transocean Ltd.’s Transocean Inc. issued $853,804,000 of 0.5% exchangeable senior bonds due 2023 on Tuesday as a result of its offer of shares and exchangeable bonds for the common shares of Songa Offshore SE and private exchange offers in which it offered exchangeable bonds for various debt of Songa, according to a filing with the Securities and Exchange Commission.

The company issued $561.44 million of the exchangeable bonds to settle its offer to the Songa shares and $292,364,000 of the exchangeable bonds to settle the offer made to certain former Songa bondholders and a former Songa loanholder.

For Songa’s common shares, Transocean offered 0.35724 of a Transocean Ltd. share and $2.99726 principal amount of 0.5% exchangeable senior bonds due 2023 for each Songa common share, as previously reported.

Songa shareholders could also choose to receive NOK 47.50 cash per share up to a maximum of NOK 125,000 per shareholder for some or all of their consideration.

The payment was based on a price of NOK 47.50 per Songa share, a 37% premium to the five-day average closing price of NOK 34.68 on Aug. 14, the last trading day before Transocean announced its offer.

Songa was valued at NOK 9.1 billion on this basis.

On Jan. 23, the company reported said it acquired 175,720,167, or about 91.5%, of Songa Offshore shares as a result of this exchange offer, which ended at 10:30 a.m. ET on Jan. 23.

Completion was subject to at least 90% of Songa’s shares being tendered.

The exchangeable bonds were issued by Transocean Inc. and exchangeable into Transocean Ltd. shares.

The exchangeables will have an initial exchange rate of 97.29756 Transocean shares per $1,000 principal amount, a price of $10.27 per share and equivalent to an exchange premium of 22.5%.

They will be non-callable.

Transocean previously said up to $575,803,000 of the exchangeables would be issued for Songa stock.

In addition exchange for Songa’s debt, Transocean previously said it would issue the exchangeables for NOK 1,206,000,000 of Songa’s SONG04 bonds from three bondholders at a price of 103.5% per bond plus accrued interest, NOK 587 million of Songa’s SONG05 bonds from two bondholders at a price of 101% per bond plus accrued interest, and a $50 million loan from Perestroika AS to Songa at a price of 100% of the principal amount plus accrued interest.

The precise amounts of exchangeables to be issued would depend on the accrued interest at the time the exchanges close and the Norwegian krone to dollar exchange rate, the company said when it opened the offers in December.

Following the closing of the acquisition of Songa, which took place on Tuesday, Transocean planned to redeem the remaining SONG04 and SONG05 bonds. Following the acquisition, Transocean owns 187,390,391 shares of Songa, representing about 97.5% of the total shares on a fully diluted basis, according to a news relase.

Songa is an offshore drilling company based in Oslo and Limassol, Cyprus. Transocean is a Houston-based offshore contract driller with a registered office in Zug, Switzerland.

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