UPDATE 1-Well firm Archer cuts debt deal with banks, Fredriksen

Thu Jan 31, 2013 1:24pm EST

Related Topics

* Archer to raise $250 mln in equity

* Sees private placement of $1/shr within next week

* Shipping tycoon John Fredriksen guarantees extra $100 mln

OSLO, Jan 31 (Reuters) - Debt-ridden well company Archer has reached a deal with its banks and shareholders, among them top driller Seadrill, that will see the firm raise $250 million in equity, with a private placement of shares expected within the next week.

The firm, which provides drilling and well services to oil companies, had breached its lending covenants at the end of the third quarter and had been in negotiations with its lenders.

Under the deal, Archer will raise $250 million in equity, which will be used to prepay debts of $100 million due in November 2013 as well as other debts totalling $150 million.

Archer's biggest shareholder Seadrill, controlled by shipping tycoon John Fredriksen, will give an additional guarantee of $100 million to the company in order to avoid further dilution to existing shareholders.

"The company intends to execute a private placement within the next week," Archer said in a statement released after the Oslo bourse was shut.

The minimum subscription price would be one dollar per share, it said.

Shares in Archer closed up 6.24 percent to 6.30 crowns ($1.15), seven times less than the price two years ago.

Archer also reported fourth-quarter earnings before interest, taxes, depreciation and amortisation of $30 million. ($1 = 5.4744 Norwegian kroner) (Reporting by Gwladys Fouche; Editing by Elaine Hardcastle)

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