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Seadrill Partners MLP issue gets cold reception

Seadrill Partners MLP issue gets cold reception
Seadrill Partners, the MLP of John Fredriksen's Seadrill, has announced plans for a public offering of 8m shares.

The announcement stated that the proceeds would be used for general corporate purposes including acquisitions and repayment of debt, but the market has not reacted well to the offering. The share prices of both Seadrill and Seadrill Partners fell around 1.5% during after hours trading.

The offering comes at a tumultuous time for the rig owner. The recent expansion of US and EU sanctions against Russia over Ukraine has cast doubts over a $4.25bn deal between Seadrill's majority-owned subsidiary North Atlantic Drilling and Russian energy giant Rosneft.

A long-serving adviser and "righthand man" to Fredriksen, Tor Olav Troeim, left the Seadrill board earlier this week as the share price continued to fall. Seadrill's share price is down 23% on its position one month ago and Seadrill Partners' share price has fallen by around 8% over the past 30 days.

Through his private holding company Hemen Holding, John Fredriksen recently bought 2m shares in Seadrill, worth around $56m, bringing his stake in the company up to 23%.

Seadrill Partners currently owns a fleet of foursemi-submersible rigs, two drillships, and three tender rigs. Morgan Stanley and Barclays will act as book running managers for the offering.