Each one in plain English, with the numbers worked through for a shareholder.
12 Apr 2012material agreement● NeutralMajor
Four days before the April 16 vote on moving to a UK parent, Rowan amended the merger agreement so the board may deliver Class A Ordinary Shares directly instead of American depositary shares (ADS), and said it now expects the merger to take effect in May 2012 rather than around April 18. This changes the earlier plan: the board may still deliver ADS as originally planned if the ordinary-share route does not work out. The filing also describes custody arrangements for record holders and UK stamp duty (0.5% on most transfers, 1.5% in certain cases) that could apply to ordinary shares not held through DTC, and warns that if DTC stopped serving the shares, listing and trading could be disrupted.
Rowan reported that a gas release occurred on March 25, 2012 on a Total E&P UK wellhead platform in the Elgin Field in the North Sea, where the Rowan Viking had been working; all Rowan and Total personnel were safely evacuated and Total is working to control the release. The attached monthly fleet status report is otherwise routine; it shows the Rowan Viking under contract to Total UK to January 2013, and the Rowan EXL IV mobilizing to Malaysia under a letter of award from Carigali Hess for about 31 months from May 2012. The filing gives no cost or financial impact from the incident.
Rowan filed its definitive proxy statement for a special stockholder meeting on April 16, 2012 to vote on the move to a UK parent. Holders of record at March 8 can vote on adopting the merger agreement (one share converts to one ADS representing one Class A Ordinary Share of Rowan UK), on takeover-style mandatory offer provisions, and on ending the classified board from 2013. The merger is expected to take effect around April 18, 2012 and needs a majority of outstanding shares. The filing says US holders should recognise gain, if any, but not loss, for US tax purposes. This follows the February announcement.
Rowan's board unanimously approved a plan to move the company's legal home from Delaware to the United Kingdom, and a merger agreement was signed on February 27, 2012. Each share of Delaware common stock would be exchanged one-for-one for an American depositary share representing a Class A Ordinary Share of a new English company, Rowan Companies plc; the ADS are expected to trade on the NYSE under RDC. Business and operations are to continue substantially as before. Completion needs stockholder approval and other consents, and is targeted for late spring 2012. The company says 81% of 2012 revenue is expected from non-U.S. operations.
Rowan furnished its routine monthly fleet status report as of February 27, 2012; the filing contains no other news. It lists rig contracts, day rates and shipyard plans, including the Rowan Norway starting a 240-day Xcite Energy term in early March 2012 and the continuing Saudi Aramco late-delivery penalties (about $21,000/day on Rowan-Mississippi, about $6,000/day on Bob Palmer), both under appeal.
Rowan furnished its routine monthly fleet status report as of February 2, 2012, listing rig contracts, day rates and shipyard plans; the filing itself contains no other news. The report shows three ultra-deepwater drillships under construction by HHI (Rowan Renaissance due late 2013, Resolute mid 2014, Reliance late 2014), and the Rowan Viking, Norway and Stavanger among the N-class jack-ups that came from SKDP. It also flags possible Saudi Aramco late-delivery penalties on two rigs (Rowan-Mississippi and Bob Palmer), which Rowan is appealing.
On September 1, 2011 Rowan closed the sale of its land drilling business (31 land rigs) to Ensign, receiving about $510 million cash at closing and expecting roughly $30 million more as a working capital adjustment. After-tax proceeds are estimated at about $370 million, to be redeployed into offshore drilling and the deepwater expansion. This completes the July agreement.
On July 19, 2011 Rowan agreed to sell its land drilling unit, Rowan Drilling Company (31 land rigs), to Ensign for $510 million cash plus working capital estimated at $30 million, subject to regulatory approval including US antitrust waiting-period expiry. After-tax proceeds of about $370 million are to go to offshore drilling and a newly announced deepwater expansion (two drillships, per the press release). This follows the LeTourneau sale as another sale of a non-offshore business.
28 June 2011asset acquisition disposition▲ GoodMajor
On June 22, 2011 Rowan completed the LeTourneau sale to Joy Global announced in May, receiving $1.1 billion in cash less a $54.3 million adjustment for a customer prepayment, with a further working capital adjustment to come. The attached pro forma figures estimate an after-tax gain of $432 million and pro forma cash of about $1.2 billion as at March 31, 2011; the manufacturing business is gone from the group.
On May 13, 2011 Rowan agreed to sell LeTourneau Technologies, its manufacturing arm (drilling, mining and timber equipment), to Joy Global for $1.1 billion in cash, subject to a working capital adjustment and regulatory approval. Management estimates after-tax proceeds of about $875 million and says most will ultimately go into offshore drilling, either more jack-ups or ultra-deepwater; the filing says there is no assurance the deal closes.
29 Nov 2010material agreement termination● Neutral
On November 24, 2010 Rowan redeemed the remaining SKDP bonds (the 11.25% bonds due 2013, in two series) at 106% of par, paying about $42.2 million for the SKDP 2 bonds (par ~$39.9m) and about $77.2 million for the SKDP 3 bonds (par ~$72.8m). It expects a combined $1.1 million loss on early repayment in Q4 2010, and put about $0.4 million and $3.6 million in escrow pending a bondholder claim that the bonds cannot be redeemed before their March 2011 and July 2011 call dates; Rowan says it expects to win and recover the escrowed money. This continues the clean-up of the SKDP debt taken on in the 2010 acquisition.
This amendment to the July 1 8-K only adds copies of the SKDP debt agreements as exhibits, but its text also updates the deal outcome. Rowan acquired the remaining SKDP shares for cash on September 30, 2010 via compulsory acquisition, and SKDP is delisted from the Norwegian OTC. Total consideration was about $13 million cash plus 11,724,818 Rowan shares. Of SKDP's ~$530 million debt at par, Rowan has bought back $141 million; the mandatory prepayment of debt secured by the Rowan Viking occurred November 1, 2010.
Rowan closed the SKDP purchase from the main sellers (5,697,663 Rowan shares for 992,335,567 SKDP shares). With exchange offer tenders it will hold about 97.16% of SKDP and plans a compulsory cash buyout of the rest and delisting. It also signed a new credit agreement (up to $250 million revolving through 2014 and $350 million term through 2015, the term part intended to refinance SKDP debt) and ended its $155 million 2008 credit agreement, which had nothing drawn. SKDP plans to sell its first rig (to be renamed Rowan Viking) to a Rowan Gibraltar subsidiary, triggering redemption of the debt secured by it at 108% of par (first lien) and 106% (second lien). Rowan also said it had bought about $80 million of SKDP debt in the open market.
Rowan completed the $400 million 5% Senior Notes due 2017 sale, with net proceeds of about $395 million. It plans to use them for general corporate purposes, including possibly repaying SKDP debt, tying the borrowing to the SKDP deal. Interest is paid semi-annually from March 1, 2011, and the notes are unsecured, ranking behind secured debt such as the MARAD-guaranteed notes.
Rowan formally launched its exchange offer for all remaining SKDP shares, running August 24 to September 14, 2010, paying in Rowan common stock. This is the follow-on tender promised in the July agreement and the form is a notice filing that attaches the offer document. The offer document was truncated, so the exchange terms are not restated here beyond the earlier 0.00574 ratio.
Rowan agreed with underwriters to sell $400 million of 5% Senior Notes due 2017 in a public offering, expected to close August 30, 2010. The notes are unsecured and sit under its July 2009 indenture. The filing does not state the use of proceeds.
Rowan issued more new shares in private deals to buy SKDP shares: 945,877 shares on August 10, 2010 (for 164,739,342 SKDP shares) and 950,282 shares on August 12 (for 165,506,270 SKDP shares). This continues the SKDP purchase and adds to the number of Rowan shares outstanding.
1 July 2010capital raising announcement● NeutralMajor
Rowan agreed to buy shares in Skeie Drilling & Production ASA (SKDP), a Norwegian developer of jack-up rigs, from certain holders by issuing about 5,954,151 new Rowan shares (0.00574 Rowan shares per SKDP share). With a separate ~1.5% stake already bought, Rowan would own 50.3% of SKDP and intends to tender for the rest on the same terms. The deal is subject to due diligence and board approval by July 19, 2010, or it terminates. The press release says SKDP has three rigs under construction and $530 million of debt, and Rowan expects about $420 million more to complete the rigs.
