Transocean has put a larger balance sheet behind its takeover of rival offshore driller Valaris. Its subsidiary Transocean International has signed an amended credit agreement with Citibank and a lender group that raises revolving commitments from 510 million dollars to 750 million dollars and extends maturity from June 2028 to October 2031, effective when the Valaris acquisition closes. Transocean said the facility was oversubscribed in syndication, and it remains secured by drilling rigs and related collateral.
The company has also retired 165 million dollars of 8 percent senior secured notes linked to the Deepwater Aquila, repaid on October 1 with cash and debt service reserve funds, for estimated interest savings of about 22 million dollars through maturity.
The takeover itself has cleared its last big regulatory test. Brazil’s competition authority CADE decided on Tuesday to allow the combination without restrictions, following the US Department of Justice’s closure of its antitrust investigation at the end of September. A fifteen day waiting period follows publication of the CADE decision before it becomes final. Shareholder approvals and other closing conditions remain, with completion targeted for the fourth quarter.
The all-stock deal, agreed in February, gives Valaris shareholders 15.235 Transocean shares for each of their shares, leaving Transocean holders with about 53 percent of the combined company and Valaris holders 47 percent. The enlarged driller will have an enterprise value of about 17 billion dollars and a fleet of 73 rigs: 33 ultra-deepwater drillships, nine semisubmersibles and 31 jackups.