At the time of initiation of the review the EDC long-term rating was BB+ with a negative Outlook, the rating on national scale at “ruAA+”. At the same time S&P affirmed the short term rating at “b”.
MOSCOW, 19 Oct. International rating Agency Standard & Poor’s has placed the long-term Issuer default ratings (IDRs) of Russian oilfield services company Eurasia Drilling Company (EDC) in foreign and national currencies in the list on review for possible downgrade, said the Agency.
At the time of initiation of the review the EDC long-term rating was BB+ with a negative Outlook, the rating on national scale at “ruAA+”. At the same time S&P affirmed the short term rating at “b”. Placing the ratings on CreditWatch reflects the Agency’s view that the possible delisting of the company’s shares, may lead to deterioration of its performance and alleviate its liquidity.
At the end of January 2015 the world’s largest oilfield services company Schlumberger announced that it has agreed to acquire 45,65% stake in EDC for about $ 1.7 billion. The deal became interested in FAS. After examining the documents, the Agency concluded that the antitrust point of view, coordination is not required, but the deal must be approved by the governmental Commission on foreign investments.
As part of the transaction, it was assumed that the largest shareholders of the Russian company will buy the shares from minority shareholders and consolidate the entire capital stock in their EDC Acquisition Company Limited (EACL). However, on 30 September, Schlumberger and EDC have abandoned the transaction after the expiration date of its conclusion.
Despite this, the implementation of the transaction for consolidation of EDC shares in EACL continues. Major shareholders and top managers of EDC on 8 October offered to buy the company at $ 10 per share and make it public. Then the price of the offer was increased to 11.75 dollars per share.
The main shareholder of EDC as at 31 December 2014 was chief Executive officer Alexander Djaparidze, EDC — he owned 31,06% stake in the company. Private investor Alexander Putilova at the end of 2014 belonged to the 22,71% of the company’s shares.