AP Moller-Maersk has shelved plans to sell off its drilling division, favouring instead to spin it off, as it pursues its strategy of focusing on transport and logistics and jettisoning its energy holdings.
Maersk Drilling will list on the Nasdaq Copenhagen in 2019, and debt financing of $1.5bn has been secured to ensure a strong capital structure after the listing.
“A.P. Moller – Maersk has concluded that listing Maersk Drilling as a standalone company presents the most optimal and long-term prospects for its shareholders, offering them the possibility to participate in the value creation opportunity of a globally leading pure play offshore drilling company with long-term development prospects,” the company said in a statement.
Maersk Drilling has 15 jack-up rigs, four semi-submersibles and four drillships. The drilling division came close to being sold to Rowan last year in a deal that would have valued it at the time at $4bn.
Maersk will continue to look for a solution for Maersk Supply Service, which is not part of the spinoff.
Jim Hagemann Snabe, chairman of Maersk, commented: “The Maersk Drilling team has done a remarkable job operating the business at a time of high uncertainty and is well positioned to become a successful company on Nasdaq Copenhagen. The announcement of the intention to list Maersk Drilling completes the decision process on the structural solutions for the major oil and oil related businesses. Yet another important step in delivering on the strategy.”
Maersk posted revenues of $9.5bn for the second quarter, 24% up on the quarter last year, giving it a profit of $26m.
“We also delivered a sharp improvement in unit cost in Ocean, after a Q1 that was negatively impacted by inflow of capacity from the acquisition of Hamburg-Süd and network issues. Profitability was significantly impacted by higher bunker prices in Q2 and remained at unsatisfactory levels. For the rest of the year we expect improvements in our profitability driven by lower unit cost and higher freight rates,” said Søren Skou, CEO Maersk.
The company has already issued a profit warning as containerlines around the world grapple with weaker than expected freight rates and high bunker bills.