Billionaire John Fredriksen buys rig, ends Hyundai dispute

Billionaire investor John Fredriksen has agreed to buy an oil drilling vessel from South Korean shipyard Hyundai Samho Heavy Industries.
Billionaire investor John Fredriksen has agreed to buy an oil drilling vessel from South Korean shipyard Hyundai Samho Heavy Industries. PHOTO: BLOOMBERG

OSLO (REUTERS) - Billionaire investor John Fredriksen has agreed to buy an oil drilling vessel from South Korean shipyard Hyundai Samho Heavy Industries, ending a lengthy dispute, rig company Seadrill said on Monday (March 13).

Mr Fredriksen will buy the "West Mira" through privately held investment firm Seatankers, and not through Seadrill which is undergoing a US$14 billion (S$19.7 billion) restructuring of debt and liabilities, and where the billionaire holds a 24 per cent stake.

The price of the transaction was not disclosed, but shipping newspaper Tradewinds separately reported that Seatankers would pay only US$360 million for the rig, about half the initial cost, following a sharp fall in demand for rigs.

The "West Mira" rig was originally ordered by Seadrill, which cancelled the contract with Hyundai in 2015 when its completion was delayed, triggering an arbitration process that had been expected to last until 2018.

As a result of the deal, Seadrill will receive a refund from Hyundai of US$170 million it had already paid for the rig, while also booking a US$44 million non-cash impairment, lifting its shares by 10 per cent in early trade.

Seatankers does not plan to become an offshore drilling operator and will instead ask Seadrill to operate the vessel.

Tradewinds also reported that Seatankers had secured an option to buy the rig "Bollstad Dolphin" from Hyundai, which firm company Fred. Olsen Energy had cancelled when delivery from the yard was delayed.