* Shares rebound 5.3 pct after cancellation of convertible
* Shares had fallen on Tuesday, making conversion price
* Says its liquidity remains strong
* Seadrill has other ways to raise capital -analyst
(Updates with share movement, analyst comment)
OSLO, July 9 Oslo-listed Seadrill
scrapped plans for a billion-dollar convertible bond issue after
a fall in its share price and said its liquidity remained
Shares in the world's biggest offshore rig firm recouped on
Wednesday the five percent fall of the previous day and the
company said the planned debt issue had been an "opportunity",
not a need.
"Although the order book was covered, the adverse price
movement led to an unattractive conversion price for the issue,"
the firm said in a statement explaining its reason for
cancelling the issue.
Seadrill, the crown jewel in shipping tycoon John
Fredriksen's business empire, had planned to issue a $1 billion
2019 convertible bond with a voluntary incentive payment offer
to convert the existing $650 million 2017 bond on
"Normally you would see shares fall in such a situation, but
5 percent was probably too much," said Baard Rosef, an analyst
at Pareto Securities referring to the 5.4 percent drop in the
share price on Tuesday. The shares rebounded on Wednesday as
investors rushed to buy the stock back.
Rosef said Seadrill had other ways of raising any capital
needed other than a convertible bond issue.
Seadrill said in a statement it would have a cash balance of
approximately $1.5 billion by the end of July.
The firm had said it planned to use the proceeds from the
bond issue to fund its new-build program and for general
In May, the company said it predicted rates for
new-generation vessels to fall to $425,000-$475,000 per day,
well below their peak of around $650,000 per day last year as
oil firms cut capital spending to protect
Until the situation improved, Seadrill has said it would not
order any more new rigs from yards on top of 19 rigs it already
has on order.
(Reporting by Nerijus Adomaitis; Editing by Elaine Hardcastle)