Songa Offshore, a Norwegian drilling contractor, announced they are facing a six-month delay of delivery of four new rigs being built. Songa’s shares fell 5.7% on news that it may have to sell more assets to finance the extended construction and profit losses.
In November 2012, Songa sold its ultra deepwater semi-submersible Songa Eclipse to Seadrill for $590 million. The sale was necessary to finance the cost of the four new rigs.
Without the sale, taking on additional debt would have meant violating its present debt covenants.
According to Songa, the delivery delays are due to capacity problems at South Korea’s Daewoo Shipbuilding and Marine Engineering.
When the new rigs were purchased, Songa was not able to meet the cash requirements and took a loan from Statoil.
Statoil has already contracted to use the four rigs upon completion of the building project.