Fredriksen’s Northern Drilling raises $10m for DSME arbitration

John Fredriksen’s rig investment company, Northern Drilling, has raised $10m through a private share offering to cover costs for the ongoing arbitration case related to claims arising from the termination of the resale contract with Daewoo Shipbuilding & Marine Engineering (DSME) for the two ultra-deepwater drillships.

In 2021, Northern Drilling canceled resale deals with DSME for the West Libra and West Aquila, citing delays in delivery as well as a repudiatory breach of contracts. The deal was struck in May 2018 at $296m for each drillship, with deliveries scheduled for January and March 2021 or earlier.

Northern Drilling’s subsidiaries made advance payments of $180m and said they would claim a refund of the installment paid, plus interest and damages.

DSME disputed these claims and commenced arbitration proceedings in London, claiming it is entitled to retain the amount paid and apply it against losses as a result of the
termination. 

As of June last year, Northern Drilling did not have any drilling units in operation or under construction. The company’s activities primarily relate to claim receivables held in connection with the termination of the resale contracts of three drilling units. The deal for the third unit, previously known as West Cobalt, was terminated in October 2019.

SpareBank 1 Markets acted as the sole bookrunner in the private placement in which Fredriksen’s Hemen Holding was allocated 1.3m new shares, corresponding to its pro-rata shareholding, and will maintain its 40.63% ownership.