April 4 (Reuters) - Nabors Industries Ltd has reached an agreement with its largest shareholder to name two independent directors to its board after the drilling rig contractor came under pressure over the underperformance of its shares.
Pamplona Capital Management, which bought 9.3 percent of Nabors last year, said in January it was “increasingly concerned” about how Nabors shares were doing, and offered help in developing the business.
Since then, Nabors has said it would start paying dividends and reiterated plans to reduce outstanding debt.
Nabors said on Thursday it added an eighth member to its board, Howard Wolf, a former lawyer who now serves on the board of energy-focused investment bank Simmons & Co. A second independent director would be nominated next year, Nabors said.
“We are pleased with the Board’s commitment to conduct a strategic review and look forward to continued constructive interaction with Nabors,” Pamplona Chairman Alex Knaster said.
The $6 billion London-based fund, backed by Russian billionaire Mikhail Fridman’s Alfa Group, had said in January it had “valuable insights” to contribute to Nabors’s development.
Alfa, which had $1.5 billion in Pamplona as of last year, owned part of the recently sold Russian oil venture TNK-BP.
Nabors Chief Executive Anthony Petrello, who has been reviewing its assets ever since taking the top job a year and a half ago, said on Thursday the board was now evaluating strategies to enhance the company’s shareholder value.
These include improving its “capital structure, reviewing its mix of businesses and improving operating performance with the assistance of an independent financial advisory firm of international reputation,” Petrello said in a statement.
Nabors shares rose in the weeks after Pamplona went public with its concerns, but have fallen back and are now 6 percent lower since Pamplona’s announcement. The stock ended Thursday at $14.90, and is now down 15 percent in the past year, while rival Helmerich & Payne is up 10 percent in the same time.