(Image Source: La Presse)
Saipem, the transaction does not involve any transfer of financial debt to Kcad
Saipem has succumbed to Kca Deutag onshore drilling activities, Onshore Drilling, for $ 550 million, or 513.45 million eurosas well as a 10% interest in the new combined entity that will be created, called Kcad.
There transaction does not involve any transfer of financial debt from Saipem to Kcad. Saipem operates its onshore drilling activities globally outside Italy, with a particular focus on Middle East and on Americasin 13 countries, with approximately 4,000 people and a portfolio of 83 proprietary onshore drilling rigs.
The drilling activity on the ground of Saipem it recorded revenues for the full year 2021 equal to 347 million euros it’s a Ebitda Adjusted of 82 million euros; Onshore Drilling Adjusted Ebitda is expected to represent approximately 20% of Saipem’s consolidated Adjusted Ebitda for the whole of 2022.
Kca Deutag is a leading company in the drilling, engineering and technology sector, operating both on land and at sea. It operates around 110 drilling rigs in 20 countries and employs 8,300 people. In financial year 2021 Kcad it recorded consolidated revenues of $ 1,196 million and an Adjusted Ebitda of $ 237 million. Consolidated net debt at the end of 2021 was $ 396 million.
The addition of Saipem in Kcad, which is already one of the most renowned international drilling operators, will bring further opportunities for value creation thanks to operational synergies and the experience brought by Saipem; in turn, Saipem will benefit from its minority stake in the entity thus enhanced. Price Sensitive Saipem Classification – General Use
In addition, the operation represents for Saipem a further step towards a more focused and resilient business model, based on the growth trends of its reference markets, concentrating efforts in the offshore drilling sector and at the same time supporting the achievement of capital structure and liquidity objectives.
The proceeds of the transaction will improve the liquidity of Saipem, reducing net debt and supporting the implementation of its 2022-25 business plan. The final consideration is subject to customary closing adjustments. The closing of the transaction – subject to the completion of the spin-off of the Onshore Drilling business from Saipem Group, upon completion of the Saipem capital increase and under the usual conditions and approvals – is expected by 31 October 2022 for activities in the Middle East and by 31 March 2023 for the Americas. As part of the operation, Saipem is assisted by JP Morgan and Lazard.
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