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Schlumberger Plans to Purchase Eurasia Drilling Company Shares
January 24, 2015 19:32


The world’s largest oilfield services company Schlumberger announced its plans to purchase a 45.65% stake in the Russia’s largest drilling company “Eurasia Drilling Company” (EDC). The total transaction value is estimated at $ 1.7 billion.

Under the terms of the agreement achieved, EDC whose shares are now traded (in the form of depositary receipts) on the London Stock Exchange will conduct delisting and cease to be a public company. The structure of the transaction suggests that the management and major shareholders of EDC will retire the shares from the market through the specially created company EDC Acquisition Limited (EASL), to which Schlumberger will provide a loan through one or more of its subsidiaries, after delisting that loan will be converted into the company shares.

After delisting Schlumberger will retire 14.98% of EDC shares from the current shareholders of the company and raise its stake up to 45.65% by means of the shares newly issued on account of the loan conversion. The remaining 54.35% of shares will remain with the management and major shareholders of EDC.

According to the data of EDC as of December 31, 2014, the company’s CEO Aleksandr Dzhaparidze owned a 30.2% stake in the company, 22.4% were owned by Aleksandr Putilov who led “Rosneft” in the late 1990s. It is assumed that Schlumberger will pay $ 22 for each share of EDC, and the total amount of the transaction, taking all other payments into account, will make up approximately $ 1.7 billion.

In addition, during the two-year period starting three years after the transaction closing Schlumberger will have the right to retire all remaining shares of EDC. The report of Schlumberger says that it is planned to close the transaction in the first quarter of 2015. The conditions that may prevent the transaction from being completed include adverse material changes of EDC and introduction of sanctions of the EU, the United States, the Cayman (where EDC is registered) or the British Virgin Islands in relation to the company or its owners.

Author: Anna Dorozhkina

Tags: Eurasia Drilling Company Schlumberger    

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