Bloomberg News

Seadrill Expects ‘Lot of Interest’ in Brazil Unit Share Sale

January 24, 2012

(Updates with use of proceeds in third paragraph.)

Jan. 24 (Bloomberg) -- Seadrill Ltd., the oil-rig operator controlled by billionaire John Fredriksen, expects a “lot of interest” in the initial share offering in its Brazilian unit, the chief financial officer said.

“Brazil is a drilling heartland market and Seadrill wants to grow and become more local,” Esa Ikaeheimonen said in an e- mail late yesterday. “We believe this is a good time, the story is very strong.”

The company, based in Bermuda, is planning to raise as much as 1.7 billion reais ($964 million) by selling as many as 64.8 million voting shares in the offering in Seabras Servicos de Petroleo SA, it said in a statement. Seabras plans to use the proceeds from the offering to make acquisitions and other investments, according to a prospectus on Brazil’s securities regulator website.

The estimated price ranges from 20 reais to 26 reais a share, and the stock, which includes an overallotment, will start trading in Sao Paulo on Feb. 13, according to the statement.

Seabras plans to sell 48 million primary shares, Ikaeheimonen said. The outlook for Seadrill and its North Atlantic Drilling Ltd. unit is good, he said. The “market looks very good and demand in all segments continues strong.”

Brazil IPOs

Seadrill is seeking to expand operations in Brazil as the industry grows on demand from oil producers such as Petroleo Brasileiro SA. The state-controlled company has the industry’s largest investment plan with a $225 billion proposal to more than double its output by the end of the decade while meeting a commitment to buy as much as 70 percent of it equipment from local providers.

Eleven companies raised 6.51 billion reais in IPOs in Brazil last year, 38 percent less than the 10.45 billion reais raised by the same number of companies in 2010, data compiled by Bloomberg show.

BM&FBovespa SA Chief Executive Officer Edemir Pinto said in October that 40 companies are waiting to list in Sao Paulo when market volatility eases. The benchmark Bovespa index lost 18 percent last year, the third worst of 18 major global indexes tracked by Bloomberg. The index is up 9.3 percent this year.

--Editors: Alex Devine, Randall Hackley

To contact the reporters on this story: Meera Bhatia in Oslo at mbhatia2@bloomberg.net; Katerina Petroff in Sao Paulo at kpetroff@bloomberg.net

To contact the editor responsible for this story: Christian Wienberg at cwienberg@bloomberg.net


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