NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN, OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL OR WOULD REQUIRE REGISTRATION OR OTHER MEASURES. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN.
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NFH 220436 AS, to be renamed Dolphin Drilling AS (“Dolphin Drilling” or the “Company”), currently a 100% owned subsidiary of Ferncliff TIH AS is contemplating a private placement, and a subsequent listing of its shares on Euronext Growth Oslo (“EGO”) (the “Listing”). The net proceeds from the Private Placement (as defined below) will primarily be used to finance the special periodic survey (“SPS”) and mobilization of Blackford and reactivation of Borgland as well as general corporate purposes and working capital. Prior to completion of the Private Placement, the Company will directly and indirectly acquire, by way of a share-swap agreement, 100% of the shares in Dolphin Drilling Holdings Limited, the current top company of the Dolphin Drilling group against issuance of consideration shares in the Company to the existing shareholders of Dolphin Drilling Holdings Limited (the “Share-Swap”). The pre-money share ownership of Dolphin Drilling will mirror the existing shareholding of Dolphin Drilling Holdings Limited, whereby S.D. Standard ETC Plc. (“SDSD”) will own approximately 38-39%, and Strategic Value Partners LLC (“SVP”) and other shareholders will own the remaining 52% and 9-10% of the Company, respectively.
The Dolphin Drilling group today owns three harsh environment moored semisubmersibles which have been rebuilt with 5th/6th generation topsides and has received a letter of award (LoA) for Blackford Dolphin in Nigeria at USD 232,500 per day plus a mobilization fee of USD 12 million commencing late 2022. The Company is well-positioned to secure additional contracts at attractive levels, benefitting from current market improvements and an attractive positioning in the niche moored semisubmersible market. In addition, the opportunity to acquire and/or manage two latest generation harsh environment semisubmersibles as well as to manage and operate non-owned rigs provide attractive additional growth opportunities. The Dolphin Drilling group has a current net cash position of approximately USD 20 million as of 31 August 2022.
“Dolphin Drilling has attractive assets, a strong team and a solid platform to leverage on the favorable market development with improved rates. The contract for Blackford Dolphin underlines the potential of the company and its assets, and we believe Dolphin Drilling will capitalize on the continued expected tight rig market for the rest of the fleet,” says Martin Nes, Chairman of SDSD and Dolphin Drilling.
The Company has retained DNB Markets, a part of DNB Bank ASA, Arctic Securities AS and Pareto Securities AS to act as Joint Bookrunners (the “Managers”) and to advise on and effect such Private Placement.
The Private Placement
To enable Dolphin Drilling to capitalize on the increasing day rate environment, Dolphin Drilling contemplates an equity issue (the “Private Placement”) raising gross proceeds of up to USD 40 million through issuing new common shares in the Company (the “Offer Shares”) at a pre-money equity value of the Company of USD 100 million.
The application period will start on 1 September 2022 at 16:30 CEST and end on 5 September 2022 at 08:00 CEST. The Managers and Dolphin Drilling may, however, at any time, and at their sole discretion, resolve to close or extend the bookbuilding period on short or without notice. If the bookbuilding period is shortened or extended, other dates referred to in this notice may be adjusted accordingly.
Allocation of Offer Shares will be determined by the Board, at its sole discretion, in consultation with the Managers. The Offer Shares is expected to be settled with existing and OTC-listed shares on a delivery-vs-payment basis through a share lending arrangement expected to be entered into between the Company, SDSD and DNB Markets. The Company will seek to register its shares on the Euronext N-OTC pending approval of its application for admission to trading on EGO, with expected commencement of trading on or about 13 September 2022.
Further, the following have pre-committed to subscribe for Offer Shares in the Private Placement
• Ferncliff TIH AS, a company controlled by Øystein Stray Spetalen, for USD 3 million directly or through a company controlled by him
• Espen Western, or a company controlled by him, for USD 1 million directly or through a company controlled by him
SVP and SDSD have entered into customary lock-up arrangements with the Managers that will restrict, subject to certain exceptions, their ability to, without the prior written consent of the Managers, issue, sell or dispose of shares, as applicable, for a period of six months after the commencement of trading in the shares on EGO.
The Private Placement will be directed towards certain Norwegian and international institutional investors subject to applicable exemptions from relevant prospectus requirements, (i) outside the United States in reliance on Regulation S under the US Securities Act of 1933, as amended (the “U.S. Securities Act”) and (ii) in the United States to investors that are either “qualified institutional buyers” (“QIBs”) as defined in Rule 144A under the US Securities Act or institutional “accredited investors” within the meaning of Rule 501(a) under(1), (2) or (7) of the U.S. Securities Act. The minimum application and allocation amount has been set to the USD equivalent of EUR 100,000. However, the Company’s board of directors (the “Board”) may, at its sole discretion, allocate Offer Shares to applicants for an amount below EUR 100,000 to the extent applicable exemptions from the prospectus requirement pursuant to applicable regulations, including Regulation (EU) 2017/1129 on prospectuses for securities as well as the UK European Union (Withdrawal) Act 2018, are available.
After the closing of the Private Placement, Dolphin Drilling will apply for its shares to be registered on EGO. Subject to approval of such application by the Oslo Stock Exchange, the first day of listing is expected to be on or about mid October 2022. Upon completion of the admission of the Company’s shares on EGO, the Company will initiate a process to transfer the shares of the Company from EGO to Euronext Expand or the main list on the Oslo Stock Exchange (the “OSE”) and anticipates, subject to satisfaction of all listing criteria and receipt of all necessary approvals and resolutions, that such listing and trading of the shares can take place during the 12 months period after the Listing. Upon successful listing of the shares of Dolphin Drilling on Euronext Expand or the OSE, the listing of the shares on EGO will cease. Further information about the transfer of the Company’ shares will be given in due course.
Conditions for the Private Placement
The completion of the Private Placement by settlement of Offer Shares towards investors is conditional upon corporate resolutions of the Company, completion of an internal reorganization of the Dolphin Drilling Group and certain other customary conditions. The Company may, in its sole discretion, in consultation with the Joint Bookrunners, cancel the Private Placement, at any time and for any reason prior to the satisfaction of these conditions without any compensation to the applicants.
The Private Placement will lapse if the conditions therefore have not been satisfied by 23 September 2022.
Advisers
DNB Markets, a part of DNB Bank ASA, Arctic Securities AS and Pareto Securities AS are acting as Managers for the Private Placement. Advokatfirmaet Schjødt AS is acting as legal counsel to the Company, and Advokatfirmaet Wiersholm AS is acting as legal counsel to the Managers.
The information in this announcement is considered to be inside information pursuant to the EU Market Abuse Regulation for SDSD. This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. This stock exchange notice was published by Espen Lundaas, consultant of SDSD, on 1 September at 17.05 CEST.
Important Notice:
These materials do not constitute or form a part of any offer of securities for sale or a solicitation of an offer to purchase securities of Dolphin Drilling in the United States or any other jurisdiction. The securities of the Company may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”). The securities of the Company have not been, and will not be, registered under the U.S. Securities Act. Any sale in the United States of the securities mentioned in this communication will be made solely to “qualified institutional buyers” as defined in Rule 144A under the U.S. Securities Act. No public offering of the securities will be made in the United States.
In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the EU Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression “EU Prospectus Regulation” means Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 (together with any applicable implementing measures in any Member State).
In the United Kingdom, this communication is only addressed to and is only directed at Qualified Investors who (i) are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the “Order”) or (ii) are persons falling within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations, etc.) (all such persons together being referred to as “Relevant Persons”). These materials are directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.
This statement contains certain forward-looking statements concerning future events, including possible issuance of equity securities of the Company. Forward-looking statements are statements that are not historical facts and may be identified by words such as “anticipate”, “believe”, “continue”, “estimate”, “expect”, “intends”, “may”, “should”, “will” and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Actual events may differ significantly from any anticipated development due to a number of factors, including without limitation, changes in investment levels and need for the Company’s services, changes in the general economic, political and market conditions in the markets in which the Company operates, the Company’s ability to attract, retain and motivate qualified personnel, changes in the Company’s ability to engage in commercially acceptable acquisitions and strategic investments, and changes in laws and regulation and the potential impact of legal proceedings and actions. Such risks, uncertainties, contingencies and other important factors include, but are not limited to, the possibility that we will determine not to, or be unable to, issue any equity securities, and could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements.
The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice. Each of the Company, the Managers and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any statement contained in this announcement whether as a result of new information, future developments or otherwise.
The Managers are acting exclusively for the Company and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, or for advice in relation to the contents of this announcement or any of the matters referred to herein. Neither the Managers nor any of their respective affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein.
This announcement is for information purposes only. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities of the Company. Neither the Managers nor any of their respective affiliates accepts any liability arising from the use of this announcement.
The Private Placement may be influenced by a range of circumstances, such as market conditions, and there is no guarantee that the Private Placement will proceed and that the Listing will occur.
Certain figures contained in this document, including financial information, may have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this document may not conform exactly with the total figure given.
The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions. Specifically, neither this announcement nor the information contained herein is for publication, distribution or release, in whole or in part, directly or indirectly, in or into or from the United States (including its territories and possessions, any State of the United States and the District of Columbia), Australia, Canada, Hong Kong, Japan or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The publication, distribution or release of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
Kilde
