Petroleum Africa
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Monday, October 31, 2022
The closing of the sale of Saipem ‘s onshore drilling business to KCA Deutag was completed on October 28 following the agreement announced on June, 1 2022. Specifically, the activities in Saudi Arabia, Congo, United Arab Emirates and Morocco have been transferred.
The agreement provides for the sale of the entirety of Saipem’s onshore drilling operations to KCAD that includes the Middle East, Africa and the Americas, for an overall cash consideration of 550 million USD, in addition to a 10% share participation in KCAD; Saipem will thus benefit from its minority shareholding in the enhanced entity. The final consideration is subject to standard pricing adjustments set out in the agreement.
Including the usual price adjustments, the consideration collected today by Saipem consists of 488 million USD in cash and the 10% participation in KCAD. Saipem will be entitled to appoint one member in the board of KCAD.
The remainder of the consideration will be collected upon transfer of the activities in Americas, Kuwait, Kazakhstan and Romania (five rigs and two active contracts), which is expected by 31st March 2023 and is subject, among others, to customary authorizations (including antitrust).
This transaction for Saipem is a milestone towards a more focused and resilient business model based on the growing trends of Saipem’s reference markets, concentrating efforts in the offshore drilling business while supporting the achievement of its capital structure and liquidity objectives.
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