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Seadrill's West Polaris drops down

Seadrill's West Polaris drops down
Seadrill is set to complete the drop down of the drillship West Polaris to a subsidiary within the next seven days.

Seadrill Operating, which is 58%-owned by Seadrill Limited, will acquire all of its parent company's shares in the entity which owns the drillship, Seadrill Polaris Limited.

Seadrill Operating will pay $204m in cash and assume $336m of existing outstanding debt on the West Polaris. A $50m seller's credit to cover the balance is being offered, which will carry an annual 6.5% interest rate and is due in 2021.

The drillship currently on charter with ExxonMobil, earning a day rate of $653,000 per day. With the acquisition, Seadrill Polaris will pay Seadrill Limited any day rate over and over $450,000 per day for the remainder of the ExxonMobil contract, which is due to end in March 2018. From then, 50% of any day rate over the same threshold will be paid through until 2025. Should the day rate fall below $450,000, the seller's credit will be reduced.

The transaction will bring $204m to the parent, along with $203,000 per day under the current charter.