S-4/A 1 s-4a.htm S-4/A 2017.12.6_RIG_FORMS4A3

 

As filed with the Securities and Exchange Commission on December 8, 2017

Registration No. 333-220791      

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


AMENDMENT NO.3

TO

FORM S-4

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933


TRANSOCEAN LTD.

TRANSOCEAN INC.

(Exact name of registrant as specified in its charter)


 

 

Transocean Ltd.

Transocean Inc.

Zug, Switzerland

Cayman Islands

(State or Other Jurisdiction of Incorporation or Organization)

(State or Other Jurisdiction of Incorporation or Organization)

1381

6719

(Primary Standard Industrial Classification Code Number)

(Primary Standard Industrial Classification Code Number)

98-0599916

66-0582307

(I.R.S. Employer Identification No.)

(I.R.S. Employer Identification No.)

Turmstrasse 30
6300 Zug, Switzerland
+41 (22) 930-9000
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

70 Harbour Drive
Grand Cayman, Cayman Islands KY1-1003
+1 (345) 745-4500
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)


Brady K. Long

Senior Vice President and General Counsel

Transocean Ltd.

c/o Transocean Offshore Deepwater Drilling Inc.

4 Greenway Plaza

Houston, Texas 77046

+1 (713) 232-7500

(Name, address, including zip code, and telephone number, including area code, of agent for service)


 

 

With copies to:

Keith M. Townsend
King & Spalding LLP
1180 Peachtree Street
Atlanta, Georgia 30309
+1 (404) 572-4600

Martin J. Hunt
King & Spalding LLP
1100 Louisiana Street, Suite 4000
Houston, Texas 77002
+1 (713) 751-3200


Approximate date of commencement of the proposed sale of the securities to the public: As soon as practicable after this registration statement becomes effective.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

 

 

Large accelerated filer   

Accelerated filer                     

Non-accelerated filer      (Do not check if a smaller reporting company)

Smaller reporting company    

 

Emerging growth company    

 

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  

 


 

CALCULATION OF REGISTRATION FEE

 

 

 

 

 

 

 

 

 

 

Title of Each Class of Securities to Be Registered

    

Amount to be
Registered

    

Proposed
Maximum
Offering Price
Per Unit

    

Proposed
Maximum
Aggregate
Offering Price

    

Amount of
Registration Fee
(1)

 

Shares, par value CHF 0.10

 

68,629,366

(2)  

N/A

 

USD 1,278,658,335.91

(3)  

USD 159,192.96

(4)

0.5% Exchangeable Senior Bonds due 2022

 

USD 575,803,000

(2)

N/A

 

USD 1,278,658,335.91

(3)

N/A

(5) 

Shares, par value CHF 0.10

 

(6)  

 

 

(6)

Guarantee of the 0.5% Exchangeable Senior Bonds due 2022

 

 

 

 

(7)


(1)

Determined in accordance with Section 6(b) of the Securities Act at a rate equal to USD 124.50 per USD 1 million of the proposed maximum aggregate offering price.

(2)

Represents the maximum number of shares, par value CHF 0.10 per share (“Transocean Shares”), of Transocean Ltd. (“Transocean”) and 0.5% Exchangeable Senior Bonds due 2022 (the “Exchangeable Bonds”) of Transocean Inc., respectively, estimated to be issuable upon completion of the offer. Based on (a) an aggregate 192,109,971 shares, with a nominal value of 0.10 EUR per share (“Songa Shares”), of Songa Offshore SE (“Songa Offshore”), subject to the offer as of September 29, 2017 consisting of (i) 137,641,567 Songa Shares outstanding, (ii) 53,403 Songa Shares issuable upon exercise of outstanding warrants to purchase Songa Shares, (iii) 53,826,371 Songa Shares issuable upon conversion of the outstanding SONG07 convertible bonds issued by Songa Offshore (ISIN No NO0010760036), and (iv) 588,630 Songa Shares issuable upon the settlement of restricted stock units issued under the Songa Offshore Long-Term Incentive Plan, and (b) the exchange ratio of 0.35724 Transocean Shares and USD 2.99726 Exchangeable Bonds for each Songa Share.

(3)

Pursuant to Rule 457(c) and Rule 457(f) under the Securities Act of 1933, as amended (the “Securities Act”), and solely for the purpose of calculating the registration fee, the proposed maximum aggregate offering price is calculated as the sum of (a) with respect to 68,617,846 Transocean Shares and USD 575,706,000 of Exchangeable Bonds registered pursuant to the intial filing of the Registration Statement on October 4, 2017, the product of (i) 192,077,725 Songa Shares subject to the Offer and (ii) the average of the high and low sale prices of Songa Shares as reported on the Oslo Stock Exchange on September 27, 2017 of NOK 53.00 (based on the noon buying rate of NOK 7.9629 for USD 1 as of September 29, 2017) and (b) with respect to an additional 11,520 Transocean Shares and USD 96,000 of Exchangeable Bonds being registered pursuant to this amendment to the Registration Statement, the product of (i) 32,350 Songa Shares subject to the Offer, being the incremental Songa Shares associated with the incremental Transocean Shares and Exchangeable Bonds being registered, and (ii) the average of the high and low sale prices of Songa Shares as reported on the Oslo Stock Exchange on November 3, 2017 of NOK 58.875 (based on the noon buying rate of NOK 8.1811 for USD 1 as of October 27, 2017).

(4)

The registration fee of $159,163.98 owed with respect to the registration of 68,617,846 Transocean Shares and USD 575,706,000 of Exchangeable Bonds was previously paid upon the initial filing of the Registration Statement on October 4, 2017.  A supplemental registration fee of $28.98 was paid in connection with the filing of Amendment No. 1 to the Registration Statement on November 6, 2017 with respect to the registration of 11,520 Transocean Shares and USD 96,000 of Exchangeable Bonds.

(5)

Covered by the filing fee paid in respect of the Transocean Shares being issued in the Offer as consideration being offered to holders of Songa Shares consists of both Transocean Shares and Exchangeable Bonds for each Songa Share, with offers and sales of Transocean Shares and Exchangeable Bonds being made to the same individuals.

(6)

Includes an indeterminate number of shares issuable upon exchange of the Exchangeable Bonds at the initial exchange rate of approximately 97.29756 Transocean Shares per USD 1,000 principal amount of Exchangeable Bonds. Pursuant to Rule 416 under the Securities Act, such number of Transocean Shares registered hereby shall include an indeterminate number of Transocean Shares that may be issued in connection with a stock split, stock dividend, recapitalization or similar event. Pursuant to Rule 457(i), there is no additional filing fee with respect to the Transocean Shares issuable upon exchange of the Exchangeable Bonds because no additional consideration will be received in connection with the exercise of the exchange right.

(7)

Pursuant to Rule 457(n), there is no additional filing fee with respect to the Guarantee by Transocean of the Exchangeable Bonds.

 

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

 


 

EXPLANATORY NOTE

This registration statement relates to the registration with the Securities and Exchange Commission (“SEC”) of shares in Transocean Ltd. (“Transocean”) and exchangeable bonds issued by Transocean Inc. and fully and unconditionally guaranteed by Transocean, all of which will be issued to shareholders of Songa Offshore SE (“Songa Offshore”) who validly tender and do not properly withdraw their shares of Songa Offshore in Transocean’s voluntary tender offer that is being made in accordance with Section 6-19 of the Norwegian Securities Trading Act of June 29, 2007. This registration statement contains two documents:

·

a prospectus; and

·

a combined offer document and prospectus that has been prepared in accordance with the Norwegian Securities Trading Act and was submitted to the Financial Supervisory Authority of Norway (Finanstilsynet) (the “Norwegian FSA”), and the Oslo Stock Exchange in connection with the offer.

The prospectus has been prepared in accordance with the Securities Act of 1933, as amended, and incorporates by reference certain information from Transocean’s filings made under the Securities Exchange Act of 1934, as amended.  The offer document has been prepared in accordance with the Norwegian Securities Trading Act of June 29, 2007 no. 75 and related secondary legislation, including the Commission Regulation (EC) no. 809/2004 implementing Directive 2003/71/EC of the European Parliament and of the Council of November 4, 2003 regarding information contained in prospectuses, as amended and as implemented in Norway.

The prospectus included in this registration statement and the offer document are substantially the same in all respects, except that:

·

the offer document has a different cover page and introductory information for investors prior to its table of contents, a copy of which is included herein beginning on page ALT-1;

·

the offer document includes the section titled “Summary,” a copy of which is included herein beginning on page ALT-6, and the sections of the prospectus included in this registration statement titled “Questions and Answers” and “Summary” are included as an annex to the offer document as described below;

·

the offer document includes additional sections titled “Responsibility for the Prospectus,” “General Information,” “Selling and Transfer Restrictions,” “Industry and Market Overview,” “Business of the Group,” “Operating and Financial Review,” “Board of Directors, Management and Employees” and “Additional Information,” copies of which are included herein beginning on page ALT-34;

·

the financial statements in the section titled “Index to Financial Statements of Songa Offshore” in the prospectus do not appear in the offer document but are incorporated therein by reference in accordance with the requirements of the Norwegian Securities Trading Act;

·

the following sections of the prospectus included in this registration statement are not required to appear in the offer document pursuant to the Norwegian Securities Trading Act and are instead included in an annex to the offer document;

o

Questions and Answers,”

o

 Summary,”

o

Summary Selected Financial Data of Transocean,”

o

Summary Selected Financial Data of Songa Offshore,”

o

Unaudited Comparative Per Share Data,”


 

o

Comparative Market Price and Dividend Information,”

o

The Combination,”

o

Ratio of Earnings to Fixed Charges,”

o

Dilution,”

o

Selected Financial Data of Transocean,”

o

Selected Financial Data of Songa Offshore,”

o

Description of Transocean Exchangeable Bonds,”

o

Experts,”

o

Where You Can Find More Information,” and

o

Incorporation of Certain Documents by Reference;”

·

references in the prospectus in this registration statement that any information will be incorporated by reference and where such information can be obtained were replaced by references to such information included in the offer document;

·

the sections and captions in the offer document are numbered in the manner customary under Norwegian disclosure practices;

·

the format of dates presented in the offer document has been presented in the manner customary in the European Union; and

·

the cross-references, the order of sections and therefore the table of contents, as well as the page numbers, of each document are different as a result of the differences outlined above.

For additional information, see pages ALT‑1 to ALT‑122 titled “Alternate Information for the Offer Document.”

 


 

The information in this prospectus is not complete and may be changed. We may not complete the offer and issue securities described herein until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any jurisdiction where the offer is not permitted.

Preliminary Prospectus

Subject to completion, dated           , 2017

Offer to exchange each outstanding share of

Songa Offshore SE

for

0.35724 newly issued shares in Transocean Ltd. and USD 2.99726 principal amount of 0.5% Exchangeable Senior Bonds due 2022, to be issued by Transocean Inc., with an option to instead receive cash consideration of NOK 47.50 per share of Songa Offshore SE up to a maximum of NOK 125,000 per shareholder

by

Transocean Ltd.


This prospectus (the “Prospectus”) has been prepared by Transocean Ltd., a corporation incorporated under the laws of Switzerland (“Transocean” or the “Company,” “we” or “us,” and together with its consolidated subsidiaries, the “Group”), in connection with its voluntary tender offer (the “Offer”) to acquire each issued and outstanding share (on a fully diluted basis) of Songa Offshore SE (the “Target” or “Songa Offshore,” and together with its consolidated subsidiaries, the “Songa Group”) in exchange for consideration per Songa Share (the “Consideration”) consisting of 0.35724 newly issued shares of Transocean (the “Consideration Shares”), each with a par value of 0.10 Swiss franc (“CHF”), and USD 2.99726 principal amount of 0.5% Exchangeable Senior Bonds due 2022, which are exchangeable into shares of the Company (the “Exchangeable Bonds”), to be issued by Transocean Inc. (“TINC”), an exempted company incorporated under the laws of the Cayman Islands and a wholly owned subsidiary of Transocean, subject to the terms and conditions as described in this Prospectus. As part of the Offer, each Songa Offshore shareholder may instead elect to receive an amount in cash of NOK 47.50 per share of Songa Offshore up to a maximum of NOK 125,000 per shareholder (the “Cash Election”) in lieu of some or all of the Consideration Shares and Exchangeable Bonds such shareholder would otherwise be entitled to receive in the Offer. The aggregate amount of Consideration paid to each Songa Offshore shareholder accepting the Offer shall be comprised, as near as possible, of 50% Consideration Shares and 50% Exchangeable Bonds, with any exercise by such shareholder of the Cash Election, if elected, being deducted first from the aggregate number of Exchangeable Bonds otherwise issuable to such shareholder and then from the aggregate number of Consideration Shares such shareholder would otherwise be entitled to receive in the Offer.

On August 13, 2017, Transocean entered into a Transaction Agreement (as amended, the “Transaction Agreement”), with Songa Offshore pursuant to which Transocean will offer to acquire all of the issued and outstanding shares of Songa Offshore, on a fully diluted basis, (the “Combination”) through the Offer. The Offer is the first step in Transocean’s plan to acquire all the outstanding shares of Songa Offshore (the “Songa Shares”). If the Offer is completed and Transocean acquires shares of Songa Offshore representing 90% or more of the voting rights in Songa Offshore, as soon as practicable following the completion of the Offer, Transocean intends to initiate a compulsory acquisition (squeeze-out) of the remaining Songa Shares not directly owned by Transocean pursuant to article 36 of the Cyprus Takeover Bids Law (L.41(I)/2007) as amended (the “Cyprus Takeover Bids Law”). See “Terms of the Offer.”

The Offer is a voluntary tender offer as set out in Section 6‑19 of the Norwegian Securities Trading Act of 29 June 2007 (“Norwegian Securities Trading Act”) and applicable regulations. You may tender your Songa Shares in the Offer as set forth in this Prospectus and the exchange offer document/Norwegian prospectus (the “Offer Document”), as approved by the Oslo Stock Exchange and the Financial Supervisory Authority of Norway.

Songa Offshore shareholders may tender Songa Shares that are issued and delivered after the expiration of the Offer Period (as defined herein) as a result of exercise of Songa Offshore warrants or restricted share units, or conversion of Songa Offshore’s convertible bonds, provided that such Songa Shares are issued prior to settlement of the Offer.

The Offer is subject to the satisfaction of, or, where permissible, waiver of certain conditions, including conditions regarding minimum acceptance of the Offer, regulatory approvals and the absence of material adverse changes. The conditions to the Offer are described in “Terms of the Offer—Conditions for Completion of the Offer.”

Subject to their fiduciary duties under applicable law, the board of directors of Songa Offshore (the “Songa Board”) has recommended that Songa Offshore shareholders accept the Offer and tender their shares to Transocean. The shareholders of Songa Offshore are, however, advised to consider carefully the potential tax consequences of accepting the Offer. See “Material Tax Considerations.”

Transocean’s shares (the “Shares”) are listed on the New York Stock Exchange (the “NYSE”) under the symbol “RIG.” Songa Offshore’s shares are listed on the Oslo Stock Exchange under the symbol “SONG.” Transocean will apply to list on the NYSE the Consideration Shares and Exchangeable Bonds (and the Shares issuable upon exchange of the Exchangeable Bonds) issued to Songa Offshore shareholders in connection with the Offer. The approval of the issuance of the Consideration Shares (and the Shares issuable upon exchange of the Exchangeable Bonds) for listing on the NYSE is a condition of the Offer.


See “Risk Factors” beginning on page [] for a discussion of various factors that you should consider before making your investment decision.

Neither the Securities and Exchange Commission (“SEC”), nor any state or provincial securities commission or regulatory authority has approved or disapproved of these securities or passed upon the adequacy or accuracy of this Prospectus. Any representation to the contrary is a criminal offense.

The date of this Prospectus is [], 2017.

This Prospectus incorporates important business and financial information about Transocean from documents filed with the SEC that have not been included in, or delivered with, this Prospectus. This information is available on the SEC’s website at www.sec.gov and from other sources. See the sections of this Prospectus titled “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference.”

You may also request copies of these documents from us, without charge, upon written or oral request to Transocean Ltd., c/o Transocean Offshore Deepwater Drilling Inc., 4 Greenway Plaza, Houston, Texas 77046, Attn: Investor Relations, or at +1 (713) 232‑7500.

In order to obtain timely delivery of the documents, you must make requests no later than five business days before the scheduled expiration date of the Offer, as it may be extended from time to time.

We are responsible for the information contained in this Prospectus. We have not authorized anyone to give you any other information, and take no responsibility for any other information that others may give you. You should not assume that the information contained in this Prospectus is accurate as of any date other than the date on the front cover of this Prospectus.

This Prospectus does not constitute an offer of securities to the public in Norway and is not a prospectus or an offer document within the meaning of the Norwegian Securities Trading Act.

 

 


 

TABLE OF CONTENTS

 

 

QUESTIONS AND ANSWERS 

1

SUMMARY 

13

SUMMARY SELECTED FINANCIAL DATA OF TRANSOCEAN 

34

SUMMARY SELECTED FINANCIAL DATA OF SONGA OFFSHORE 

35

UNAUDITED COMPARATIVE PER SHARE DATA 

37

COMPARATIVE MARKET PRICE AND DIVIDEND INFORMATION 

38

Comparative Historical Market Price Information 

38

Dividends 

38

Recent and Comparative Market Price Information 

39

RISK FACTORS 

41

Risks Related to the Business of the Group 

41

Risks Related to the Industry in Which the Group Operates 

52

Financial Risks 

59

Risks Related to the Shares 

67

Risks Related to the Exchangeable Bonds 

68

Risks Related to the Offer 

74

Risks Related to the Business of the Songa Group 

79

Risks Related to the Songa Group’s Financial Situation 

83

FORWARD-LOOKING STATEMENTS 

87

TERMS OF THE OFFER 

91

General 

91

The Offeror – Transocean Ltd. 

91

The Target – Songa Offshore SE 

92

Consideration 

92

Transaction Agreement 

94

Offer Period 

94

Conditions for Completion of the Offer 

94

Pre-acceptance Undertakings 

98

Long Stop Date 

99

Refinancing of Certain Songa Offshore Indebtedness 

99

Treatment of Other Songa Offshore Securities in the Offer 

99

Procedures for Accepting the Offer 

100

Blocking of Tendered Shares and Shareholder Rights 

102

Amendments to the Offer 

102

Notices 

103

i


 

 

 

Settlement 

103

Expenses 

106

Tax 

107

Dilution

107

Additional Information 

107

THE COMBINATION 

113

Background and Reasons for the Combination 

113

Projected Financial Information 

131

Summary of Clarksons’ Analyses 

135

Summary of Pareto’s Illustrative Calculations 

143

Material Interests of Songa Offshore’s Board and Management in the Combination 

146

The Transaction Agreement 

147

DESCRIPTION OF THE SONGA OFFSHORE BUSINESS 

160

Corporate Information 

160

Legal Structure 

161

The Business of the Songa Group 

163

Board of Directors, Management and Employees 

172

Share Capital 

172

Auditor 

173

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF SONGA OFFSHORE 

173

Overview 

174

Key Events 

175

Performance and Other Key Indicators 

176

Operating Results 

178

Financial Condition, Liquidity and Capital Resources 

186

Refinancing 

187

Cash Flow 

189

Contractual Obligations 

191

Contingencies 

191

Borrowings of the Songa Group 

193

Critical and Significant Accounting Policies and New Accounting Pronouncements 

194

Cautionary Statement Regarding Forward Looking Statements 

194

Quantitative and Qualitative Disclosures About Market Risk 

195

CAPITALIZATION AND INDEBTEDNESS 

196

Capitalization 

196

ii


 

 

 

Indebtedness 

198

Contingent and Indirect Indebtedness 

199

Working Capital Statement 

199

RATIO OF EARNINGS TO FIXED CHARGES 

200

DILUTION 

201

SELECTED FINANCIAL INFORMATION OF TRANSOCEAN 

203

SELECTED FINANCIAL INFORMATION OF SONGA OFFSHORE 

204

DIVIDENDS AND DIVIDEND POLICY 

206

Dividend Policy 

206

Dividend History 

206

Legal Constraints on the Distribution of Dividends 

207

DESCRIPTION OF TRANSOCEAN SHARES

208

Description of the Shares and Share Capital 

208

Stock Exchange Listing 

208

Share Capital History 

208

Ownership Structure 

209

Authorization to Increase the Share Capital and to Issue Shares 

209

Authorization to Acquire Treasury Shares 

211

Other Financial Instruments Related to Shares 

212

Shareholder Rights 

212

Summary of the Company’s Articles of Association 

212

Certain Aspects of Swiss Corporate Law 

215

Shareholders’ Agreement 

226

DESCRIPTION OF TRANSOCEAN EXCHANGEABLE BONDS 

227

BENEFICIAL OWNERSHIP OF TRANSOCEAN 

254

Security Ownership of Significant Shareholders 

254

Security Ownership of Transocean Directors and Executive Officers 

255

BENEFICIAL OWNERSHIP OF SHARES OF SONGA 

256

Security Ownership of Significant Shareholders 

256

Security Ownership of Songa Offshore Directors and Executive Officers 

257

COMPARISON OF SHAREHOLDER RIGHTS 

258

Purpose and Term of Existence 

258

Capitalization 

258

Preemptive Rights and Advance Subscription Rights 

260

Dividends and Other Distributions; Repurchases of Shares 

262

iii


 

 

 

Approval of Business Combinations 

264

Mandatory Bid Rules 

267

Special Vote Required for Combinations with Interested Shareholders 

268

Appraisal Rights and Compulsory Acquisitions 

268

Election of Directors 

268

Vacancies on Board of Directors 

269

Removal of Directors 

269

Board and Committee Composition 

270

Duties of the Board of Directors 

271

Indemnification of Directors, Officers, and Others; Insurance 

272

Limitation on Director Liability 

273

Directors’ Conflicts of Interest 

273

Shareholders’ Suits 

274

Shareholder Consent to Action Without Meeting 

275

Annual Meetings of Shareholders 

276

Special Meetings of Shareholders

277

Record Dates for Shareholders Meetings 

278

Director Nominations; Proposals of Shareholders 

278

Adjournment of Shareholder Meetings 

279

Voting Rights 

279

Amendment of Governing Documents 

282

Quorum Requirements 

283

Say on Pay 

283

Inspection of Books and Records; Special Investigation 

284

Transfer and Registration of Shares 

284

Rights upon Liquidation 

285

Enforcement of Civil Liabilities Against Foreign Persons 

286

MATERIAL TAX CONSIDERATIONS 

288

Norwegian Taxation 

288

United States Taxation 

290

Swiss Taxation 

305

LEGAL MATTERS 

307

EXPERTS 

307

WHERE YOU CAN FIND MORE INFORMATION 

307

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 

309

INDEX TO FINANCIAL STATEMENTS OF SONGA OFFSHORE 

F-1

iv


 

v


 

QUESTIONS AND ANSWERS

The following are some of the questions you, as a shareholder of Songa Offshore SE, may have and answers to those questions. These questions and answers are not meant to be a substitute for the information contained in the remainder of this Prospectus because the information in this section does not provide all the important information regarding the Offer. We urge you to read this document in its entirety prior to making any decision as to the matters described in this Prospectus. In this Prospectus, unless otherwise specified, the terms “we,” “our,” “us,” “Company,” and “Transocean” refer to Transocean Ltd,. or Transocean Ltd. together with its subsidiaries, as the context requires.

Q:   WHAT IS TRANSOCEAN PROPOSING?

A:   Transocean has entered into an agreement with Songa Offshore pursuant to which Transocean intends to acquire all of the issued and outstanding Songa Shares (on a fully diluted basis) through a voluntary tender offer, which we refer to as the Offer, as described in further detail below. In the Offer, Transocean is offering to exchange, for each Songa Share, a combination of (i) 0.35724 Consideration Shares issued by Transocean and (ii) USD 2.99726 principal amount of Exchangeable Bonds of TINC, a wholly-owned subsidiary of Transocean, which are exchangeable into Shares. As part of the Offer, each shareholder of Songa Offshore may instead elect to receive cash of NOK 47.50 per Songa Share up to a maximum of NOK 125,000 per shareholder. The aggregate consideration to be paid to each Songa Offshore shareholder accepting the Offer shall be comprised, as nearly as possible, of 50% Consideration Shares and 50% Exchangeable Bonds, with any exercise by such shareholder of the Cash Election being deducted first from the aggregate principal amount of Exchangeable Bonds otherwise issuable to such shareholder and second from the aggregate number of Consideration Shares otherwise issuable to such shareholder. After completing the Offer and acquiring 90% or more of the voting rights of Songa Offshore, Transocean intends to initiate a compulsory “squeeze-out” acquisition of the remaining Songa Shares not owned by Transocean pursuant to the Cyprus Takeover Bids Law. A copy of the Transaction Agreement is attached hereto as Annex A and is incorporated by reference herein.

Songa Offshore shareholders may tender Songa Shares in the Offer as set forth in this Prospectus.

Q:   WHO IS MAKING THE OFFER?

A:   This Offer is being made by Transocean Ltd.

Q:   WHY IS TRANSOCEAN MAKING THE OFFER?

A:   Transocean believes that the Combination will benefit Transocean shareholders. See “Background and Reasons for the Combination” for further detail.

1


 

Q:   WHAT WILL SONGA OFFSHORE SHAREHOLDERS RECEIVE IN EXCHANGE FOR SONGA SHARES?

A:   Transocean will offer, upon the terms and subject to the conditions described in this Prospectus, to exchange each Songa Share that is validly tendered and not properly withdrawn, for:

(1)

0.35724 Consideration Shares; and

(2)

USD 2.99726 principal amount of Exchangeable Bonds.

As part of the Offer, each Songa Offshore shareholder may instead elect to receive up to NOK 125,000 in cash pursuant to the Cash Election in lieu of some or all of the Consideration Shares and Exchangeable Bonds such shareholder would otherwise be entitled to receive in the Offer.

The aggregate consideration to be paid to each Songa Offshore shareholder accepting the Offer shall be comprised, as nearly as possible, of 50% Consideration Shares and 50% Exchangeable Bonds, with any exercise by such shareholder of the Cash Election being deducted first from the aggregate principal amount of Exchangeable Bonds otherwise issuable to such shareholder and second from the aggregate number of Consideration Shares otherwise issuable to such shareholder.

Based on the closing price of 10.07 for the Shares on the NYSE on November 24, 2017 and an exchange rate of 8.1340 NOK per USD, which is the NOK/USD exchange rate on November 24, 2017 as determined by Norges Bank, the aggregate value of the Consideration to be received per Songa Share is NOK 53.15, assuming all Exchangeable Bonds received in the Offer are immediately converted into Transocean shares.  By comparison, the closing price of the Songa Shares on the Oslo Stock Exchange on November 24, 2017 was NOK 59.25.

Holders may exchange their Exchangeable Bonds for Shares at any time prior to the close of business on the business day immediately preceding the maturity date. The initial exchange rate of the Exchangeable Bonds is 97.29756 Shares per USD 1,000 principal amount of Exchangeable Bonds. See “Description of Transocean Exchangeable Bonds–Exchange Rights.”

Transocean will not issue any fractional Consideration Shares or fractional amounts of Exchangeable Bonds (each of which has a principal amount of USD 1,000) in the Offer. Each Songa Offshore shareholder who accepts the Offer and, following the completion of the Offer, any Songa Offshore shareholder in connection with a subsequent mandatory offer or compulsory acquisition (squeeze-out) (a) who would otherwise be entitled to receive a fraction of a Consideration Share will instead receive, for the fraction of a Consideration Share, an amount in cash based on USD 8.39, the closing price of the Consideration Shares on the NYSE on August 14, 2017, the last trading day prior to the announcement of the proposed Combination and Offer (the “Reference Price”), and (b) who would otherwise be entitled to receive a fractional amount of Exchangeable Bonds will instead receive, for the fractional amount of Exchangeable Bonds, an amount in cash based on USD 1,000, the principal amount per Exchangeable Bond, and in each case, paid in NOK, based on an exchange rate of 7.923 NOK per U.S. dollar which is the NOK/USD closing price at 4:00 p.m. CET as determined by Norges Bank, on August 14, 2017, the trading day immediately preceding the announcement of the Offer.

2


 

We refer to the value of any cash and the value of the aggregate number of Consideration Shares and Exchangeable Bonds to be delivered per Songa Offshore shareholder as the “Offer Price.”

Q:   HOW LONG DO SONGA OFFSHORE SHAREHOLDERS HAVE TO DECIDE WHETHER TO TENDER?

A:   The shareholders of Songa Offshore may accept the Offer in the period from and including [●], 2017 to and including [●], 2017 at 4:30 p.m. (CET), as extended from time to time (the “Offer Period”). Transocean may, in its sole discretion, extend the Offer Period (one or more times), however, the Offer Period may not be extended beyond 4:30 p.m. (CET), on [●], 2018. References to the Offer Period in this Prospectus refer to the Offer Period as extended from time to time. If the Offer Period is extended, the other dates referred to in this section may be changed accordingly and any acceptance forms (“Acceptance Forms”) received will remain binding and irrevocable for the length of the extension.

Q:   WHAT IS THE PROCEDURE FOR TENDERING SONGA SHARES?

A:   Songa Offshore shareholders who wish to accept the Offer must complete and sign the acceptance form enclosed with this Prospectus as Annex B and return it to the Settlement Agent prior to the expiration of the Offer Period. Acceptances may be revoked until the end of the Offer Period.

Q:   UNTIL WHAT TIME CAN TENDERED SONGA SHARES BE WITHDRAWN?

A:   The acceptance of the Offer is binding once the Settlement Agent has received the acceptance form, except as otherwise required by applicable law. Prior to the expiration of the Offer, Songa Offshore shareholders may withdraw any shares tendered in the Offer. At the end of the Offer Period, withdrawal rights will cease, and any Songa Shares tendered in the Offer cannot be withdrawn. If the Offer Period is extended, Songa Offshore shareholders may withdraw their shares until the end of the Offer Period as extended. Shareholders that accept the Offer will remain the beneficial owners of their Songa Shares and retain voting rights related thereto until settlement has taken place.

Q:   WHAT IS THE PROCEDURE TO WITHDRAW PREVIOUSLY TENDERED SONGA SHARES?

A:   To withdraw previously tendered Songa Shares (except for pre-acceptance undertakings, which have no withdrawal rights unless the Offer is terminated), a written notice of withdrawal included as Annex C must, prior to the expiration of the Offer Period, be timely received by the Settlement Agent. The written notice of withdrawal must specify the number of Songa Shares withdrawn and instruct the Settlement Agent holding the shares to release the blocking on the VPS account specified by the withdrawing shareholder.

Q:   CAN TENDERED SONGA SHARES BE TRADED?

A:   No. By giving a duly executed acceptance form to the Settlement Agent, Songa Offshore shareholders give an authorization to block the Songa Shares to which the acceptance form relates, in favor of the Settlement Agent, who is authorized to transfer validly tendered Songa Shares to Transocean. As consideration for the contribution of Songa Shares, Transocean will issue the Consideration Shares, cause TINC to issue the Exchangeable Bonds and, subject to an election of Songa Offshore shareholders, pay cash for the purposes of the settlement at the completion of the Offer. It is not possible for shareholders to dispose of the Songa

3


 

Shares when they are blocked, although such shareholders will, to the extent permitted under Norwegian law, remain the legal owners of their Songa Shares and retain voting rights and other shareholder rights associated with such tendered shares until settlement occurs. Additionally, tendering Songa Offshore shareholders are free to dispose of any other securities not registered in the same VPS-account as the blocked Songa Shares. In the event the Offer is cancelled, the blocking will be terminated. 

Q:   CAN THE OFFER BE EXTENDED AND, IF SO, UNDER WHAT CIRCUMSTANCES?

A:   Unless the Transaction Agreement has been terminated, Transocean will extend the Offer for any period required by applicable U.S. federal securities laws and the rules and regulations of the SEC, the NYSE, the Oslo Stock Exchange, applicable Norwegian law or applicable laws and regulations of Cyprus, but in no event will Transocean be required to extend the Offer past [●], 2018. Additionally, if at any scheduled date of expiration of the Offer, the closing conditions described under “Terms of the Offer—Conditions for Completion of the Offer” have not been satisfied or waived, Transocean may elect to, and will if reasonably requested by Songa Offshore, extend the Offer to a date that is not more than ten U.S. business days after such previously scheduled date of expiration, provided, however, that if as of any date of expiration, conditions in items (1) and (2) under “Terms of the Offer—Conditions for Completion of the Offer” have not been satisfied or waived, Transocean may elect to, and will if reasonably requested by Songa Offshore, extend the Offer (to the extent legally permissible under applicable law) to a date that is not more than twenty U.S. business days after the then-scheduled date of expiration, which date shall in no event be later than 4:30 p.m. (CET) on January 31, 2018, which we refer to as the Long Stop Date (as extended, if applicable, at the election of Transocean one time for no more than 25 U.S. business days) for the purpose of soliciting additional proxies from shareholders for the election of the chairman of the board of directors of Songa Offshore to the board of directors of Transocean. References in this Prospectus to the Long Stop Date refer to the Long Stop Date as extended from time to time.

Q:   HOW WILL SONGA OFFSHORE SHAREHOLDERS BE NOTIFIED IF THE OFFER IS EXTENDED?

A:   Transocean will publish any notices of extension of the Offer Period by notification to the Oslo Stock Exchange. Notices will be deemed made when the Oslo Stock Exchange has published the notice through its information system. Transocean will without undue delay notify the Oslo Stock Exchange if the conditions of the Offer are met or waived or if the Offer is cancelled. Transocean will also issue a press release and otherwise comply with its obligations under U.S. law with respect to informing security holders of any material change in the information published, sent or given to security holders.

Q:   WHAT ARE THE CONDITIONS TO THE OFFER?

A:   The Offer will be subject to a number of conditions, including:

(1)

mininum acceptance of the Offer by more than 90% of the total share capital of Songa Offshore (on a fully diluted basis);

(2)

the receipt of government and regulatory approvals;

(3)

no court or governmental or regulatory intervention;

4


 

(4)

no issue of shares or equity instruments and no distributions by Songa Offshore;

(5)

no Material Adverse Change (as defined in the Transaction Agreement);

(6)

approval of the issuance of the Consideration Shares by Transocean’s shareholders and registration of the Consideration Shares with the commercial register;

(7)

listing of the Consideration Shares and the Shares issuable upon conversion of the Exchangeable Bonds on the NYSE;

(8)

the registration statement with respect to the Consisderation Shares and Exchangeable Bonds being declared effective by the SEC;

(9)

no inaccuracies in information provided;

(10)

compliance by Songa Offshore in all material respects with all covenants in the Transaction Agreement and no material breach by Songa Offshore of its representations and warranties in the Transaction Agreement; and

(11)

the election of the designee of Perestroika AS to the Transocean Board (the “Perestroika Designee”).

For more information on the conditions to the Offer, see “Terms of the Offer—Conditions for Completion of the Offer.” If the Offer has not become unconditional by the Long Stop Date (i.e., if all conditions have not been satisfied or waived, where permissible), the Offer will lapse and any tendered shares will be released by the Settlement Agent and returned to the relevant tendering shareholder.

Q:   WHEN DO YOU EXPECT THE OFFER TO BE COMPLETED AND WHEN WILL THE OFFER CONSIDERATION BE PAID?

A:   The timing for consummation of the Offer will depend on the satisfaction of the conditions to the Offer. As a result, there can be no certainty as to when, and whether, Transocean will be able to complete the Offer. If any of the conditions to the Offer have not been satisfied or, where permissible, waived, on or prior to 4:30 p.m. (CET) on the Long Stop Date, then the Offer will terminate. The conditions to the Offer are discussed in “Terms of the Offer—Conditions for Completion of the Offer.”

If the Offer is consummated, then Songa Offshore shareholders who validly tender during the Offer Period and do not properly withdraw their tendered Songa Shares will receive the Consideration Shares, Exchangeable Bonds and/or cash, as applicable, in settlement of the Offer promptly following the expiration of the Offer Period and, in any case, no later than 15 business days following the expiration of the Offer Period. We expect such settlement to occur within five business days following the expiration of the Offer Period.

The result of the Offer is expected to be published no later than the next business day following the expiration of the Offer Period.

After the expiration of the Offer Period, Songa Offshore shareholders may not withdraw their tendered shares. If the Offer is not completed, shareholders who have tendered their Songa Shares in the Offer will have the blocking of their shares terminated within three U.S. business days.

5


 

Q:   HOW WILL THE SONGA SHARES HELD BY SONGA OFFSHORE SHAREHOLDERS WHO DO NOT TENDER THEIR SHARES BE AFFECTED FOLLOWING THE OFFER?

A:   Following the completion of the Offer, the trading market for any remaining Songa Shares not exchanged in the Offer may be substantially limited compared with historic trading levels. As a result, the price for Songa Shares in the secondary market may decline following the completion of the Offer. Holders of Songa Shares who do not participate in the Offer may not be able to sell their Songa Shares at a favorable price, if at all, following the completion of the Offer.

In addition, Transocean intends to promptly apply to conduct a compulsory acquisition (squeeze-out) under the Cyprus Takeover Bids Law following completion of the Offer. However, Transocean may not be able to complete such a compulsory acquisition in a prompt manner, if at all. In addition, the tax treatment of the Exchangeable Bonds issued in the compulsory acquisition may differ from the tax treatment of the Exchangeable Bonds issued in the Offer. In that case any Exchangeable Bonds issued in the compulsory acquisition may not be fungible for trading purposes with Exchangeable Bonds issued in the Offer and may therefore trade in the secondary market at a lower price than Exchangeable Bonds issued in the Offer, and any such secondary market for Exchangeable Bonds issued in the compulsory acquisition may be significantly less liquid than any secondary market for Exchangeable Bonds issued in the Offer.

For a more complete discussion on potential consequences in the event that you decide not to tender your Songa Shares, see “Risk Factors—Risks Factors Related to the Offer.”

Q:   HAVE ANY SONGA OFFSHORE SHAREHOLDERS COMMITTED TO TENDER THEIR SHARES IN THE OFFER?

A:   In connection with the execution of the Transaction Agreement, Transocean obtained irrevocable undertakings from Songa Offshore shareholders beneficially owning approximately 76.6% of the Songa Shares (on a fully diluted basis) to tender their shares in the Offer, including a commitment from Songa Offshore’s largest shareholder, Perestroika AS.  For further detail, see “Terms of the Offer—Pre-acceptance Undertakings.”

Based on the number of Songa Shares outstanding as of October 31, 2017, in order to satisfy the condition that Songa Offshore shareholders holding a number of Songa Shares representing more than 90% of the total share capital of Songa Offshore, on a fully diluted basis, shall in the aggregate have accepted the Offer, a total of 172,898,975 Songa Shares must be tendered in the Offer. We expect that 146,517,811 Songa Shares will be tendered in the Offer pursuant to the pre-acceptance agreements received by Transocean, meaning that an additional 26,381,164 Songa Shares must be tendered to satisfy this condition.

Q:   HOW WILL SONGA OFFSHORE SHAREHOLDERS BE AFFECTED IN THE EVENT OF A SQUEEZE-OUT TRANSACTION?

A:   In the event of any “squeeze-out” transaction in which Transocean acquires the remaining Songa Shares not tendered in the Offer, such Songa Shares would be automatically converted into the right to receive adequate compensation as determined under the Cyprus Takeover Bids Law.

6


 

If the Offer is completed and Transocean, as a result of the Offer or otherwise, or any person acting in concert with Transocean, becomes the owner of Songa Shares representing more than 30% of the outstanding voting rights, Transocean will be required under Section 13 of the Cyprus Takeover Bids Law to make a mandatory offer for the remaining shares, unless Transocean, following completion of the Offer, holds at least 90% of the shares and votes in Songa Offshore and within three months resolves a compulsory acquisition (squeeze-out). The offer price for such mandatory offer must be equal to, or higher than, the highest price paid, or agreed to be paid, by Transocean or any person acting in concert with Transocean for the Songa Shares during the six-month period prior to the date on which the obligation to make a mandatory offer is triggered. If, as a result of the Offer or a subsequent mandatory offer,, Transocean acquires and holds 90% or more of the total issued Songa Shares representing 90% or more of the voting rights in Songa Offshore, Transocean intends to promptly carry out a compulsory acquisition of the remaining Songa Shares in accordance with the procedures outlined above. In accordance with Section 36(3) of the Cyprus Takeover Bids Law, the consideration to be offered in case of a compulsory acquisition should be in the same form and at least equal to the consideration given in the Offer, while in any case cash consideration must be offered as an alternative. See “Terms of the Offer—Additional Information—Mandatory Offer” and “Terms of the Offer—Additional Information—Compulsory Acquisition.

Q:   HOW WILL REMAINING SONGA OFFSHORE SHAREHOLDERS BE AFFECTED IN THE EVENT THAT TRANSOCEAN IS UNABLE TO AFFECT A SQUEEZE-OUT TRANSACTION FOLLOWING COMPLETION OF THE OFFER?

A:   Unless we elect to waive the minimum tender condition, upon completion of the Offer, we will be the owner of Songa Shares representing more than 90% of the outstanding voting rights of Songa Offshore and intend to initiate a compulsory acquisition (squeeze-out) within three months following completion of the the Offer as described in “Compulsory Acquisition” below.  If we elect to waive the minimum tender condition, we will extend the Offer and disseminate revised offer materials containing disclosure about the waiver and the impact of the lower acceptance level on the combined entity after the Offer. If the Offer is completed and Transocean, as a result of the Offer or otherwise, or any person acting in concert with Transocean, becomes the owner of Songa Shares representing more than 30% of the outstanding voting rights but less than 90%, Transocean will be required under Section 13 of the Cyprus Takeover Bids Law to make a mandatory cash offer for the remaining shares. See “—Mandatory Offer” below for further information on the applicable mandatory offer rules. A subsequent mandatory offer must include a cash alternative but is not required to include consideration in Consideration Shares and/or Exchangeable Bonds.

Transocean may seek a delisting of the shares of Songa Offshore from the Oslo Stock Exchange even if it does not hold 90% or more of the shares and voting rights in Songa Offshore following completion of the Offer. If Transocean no longer considers the listing of Songa Offshore's shares on the Oslo Stock Exchange appropriate, it may propose at a general meeting of Songa Offshore that the company apply for delisting of its shares from the Oslo Stock Exchange. Although there is no minimum requirement as to the percentage of shares and voting rights Transocean must hold in Songa Offshore, an application for delisting requires the approval of the same majority as required to amend Songa’s Articles of Association at a general meeting, which is 75% of votes present.  See “—Delisting from Oslo Stock Exchange” below for further information. An application for delisting will be approved or rejected by the Oslo Stock Exchange in

7


 

accordance with the stock exchange rules, taking into account, among other things, the interests of minority shareholders. Whether an application for delisting will be approved in the event Transocean holds less than 90% of the shares in Songa Offshore is therefore uncertain. A delisting would not trigger a mandatory offer, squeeze-out or sell-out right under Norwegian law.

For as long as Songa Offshore remains listed, Songa Offshore will be subject to the Oslo Stock Exchange continuing obligations and the applicable requirements of the Norwegian Securities Trading Act of 29 June 2007 no. 75 (the “Norwegian Securities Trading Act”) and related secondary regulation, which imposes requirements on Songa Offshore to the benefit of remaining Songa Offshore shareholders, including, among others, financial and other reporting obligations and the duty to observe the principle of equal treatment of shareholders.

Q:   WHAT ARE THE RIGHTS OF REMAINING SONGA OFFSHORE SHAREHOLDERS IN THE EVENT TRANSOCEAN IS UNABLE TO EFFECT A SQUEEZE-OUT TRANSACTION FOLLOWING COMPLETION OF THE OFFER?

If the Offer is completed and Transocean does not hold 90% or more of the shares and voting rights in Songa Offshore, the Cypress Takeover Bids Law does not provide for any other means of compulsory acquisition or any squeeze-out rights if ownership levels are below 90%. Any remaining Songa Offshore shareholders will retain their existing rights, including preemptive rights, the right to receive dividends, transfer rights, rights to participate in Annual General Meetings of Songa Offshore (including the right to vote for directors and the right to participate in meetings convened for the purposes of alteration of Songa Offshore’s capital), liquidation rights and statutory inspection rights. For a complete discussion of these rights, see the discussions of the rights of Songa Offshore shareholders in “Comparison of Shareholder Rights.

Q:   ARE APPRAISAL RIGHTS AVAILABLE IN THE COMBINATION?

A:   There are no appraisal rights relevant to the Offer under Norwegian or Cyprus law.In the event of a squeeze-out transaction following completion of the Offer, Cyprus law would provide for certain rights for the remaining 10% or fewer Songa Offshore shareholders. For more information, see “Comparison of Shareholder Rights—Appraisal Rights and Compulsory Acquisitions.”

Q:   WHAT WILL HAPPEN TO SONGA RESTRICTED STOCK UNITS IN THE OFFER?

A:   Certain members of the management of Songa Offshore own unvested restricted stock units that will accelerate in connection with the Offer. We currently expect that prior to the expiration of the Offer, the vesting of all unvested restricted stock rights held by Songa Offshore shareholders under the Songa Offshore Long-Term Incentive Plan will be accelerated, and these shares may be tendered in the Offer on the same basis as other Songa Shares. For more information see “Material Interests of Songa Offshore’s Board and Management in the Combination.”

8


 

Q:   WILL SONGA OFFSHORE SHAREHOLDERS BE OBLIGATED TO PAY ANY FEES OR COMMISSIONS TO EXCHANGE SONGA SHARES?

A:   Songa Offshore shareholders who hold their Songa Shares in Norwegian custody accounts will not incur any fees and expenses in connection with tendering their Songa Shares in the Offer (except for the costs of transmitting the declaration of acceptance to their custodian bank).

Q:   WILL SONGA OFFSHORE SHAREHOLDERS BE SUBJECT TO UNITED STATES FEDERAL INCOME TAX ON THE CONSIDERATION SHARES, EXCHANGEABLE BONDS AND CASH RECEIVED IN THE EXCHANGE OFFER?

A:   The exchange of Songa Shares for Shares, Exchangeable Bonds and, if elected, cash pursuant to the Offer will be a taxable transaction for United States federal income tax purposes. U.S. holders (as defined in “Material Tax Considerations—United States Taxation”) of Songa Shares generally will recognize gain or loss equal to the difference, if any, between (i) the sum of (A) the fair market value of any Shares received in exchange for such Songa Shares, determined in U.S. dollars, plus (B) the issue price, as determined for United States federal income tax purposes, of the Exchangeable Bonds received in exchange for such Songa Shares, plus (C) the U.S. dollar amount of any cash received in Norwegian kroner in exchange for such Songa Shares, plus (D) any cash received in lieu of any fractional Consideration Shares or Exchangeable Bonds and (ii) such U.S. holder’s adjusted tax basis in the Songa Shares. Provided that Songa Offshore is not treated as a passive foreign investment company for U.S. federal income tax purposes, any gain or loss recognized upon the exchange generally will be treated as capital gain or loss.

A non-U.S. holder (as defined in “Material Tax Considerations—United States Taxation”) will generally not be subject to United States federal income tax on gain recognized on exchange of Songa Shares pursuant to the exchange offer unless the gain is “effectively connected” with the non-U.S. holder’s conduct of a trade or business in the United States or the non-U.S. holder is an individual present in the United States for 183 or more days in the taxable year of the exchange, and certain other requirements are met.

The foregoing is a brief summary of United States federal income tax consequences only and is qualified by the description of United States federal income tax considerations in “Material Tax Considerations—United States Taxation.” Tax matters are very complicated, and the tax consequences of the exchange offer to a particular holder will depend in part on such holder’s circumstances. Accordingly, holders of Songa Shares are urged to consult their own tax advisors for a full understanding of the tax consequences of the exchange offer to them, including the applicability of United States federal, state, local and foreign income and other tax laws.

Q:   WILL SONGA OFFSHORE SHAREHOLDERS BE SUBJECT TO NORWEGIAN TAXATION ON THE SHARES, EXCHANGEABLE BONDS AND CASH RECEIVED IN THE OFFER?

A:   The exchange of Songa Shares for Shares, Exchangeable Bonds and cash pursuant to the Offer will be a taxable transaction for Norwegian income tax purposes for individual shareholders, while for corporate shareholders the transaction is expected to normally be tax exempt under the Norwegian exemption method. Norwegian individual holders (see “Material Tax Considerations—Norwegian Taxation—The Exchange of Songa Shares for Consideration”) of Songa Shares generally will recognize gain or loss equal

9


 

to the difference, if any, between (i) the sum of (A) the fair market value of any Shares received in exchange for such Songa Shares, determined in NOK, plus (B) the issue price, as determined for Norwegian income tax purposes, of the Exchangeable Bonds received in the Offer, plus (C) the amount of any cash received in Norwegian kroner received in the Offer and (ii) such individual Norwegian holder’s tax basis in the Songa Shares exchanged. Any gain or loss recognized by a Norwegian holder in connection with the Offer generally will be treated as capital gain or loss.

Songa Offshore shareholders who are presently also holders of Shares or, following the consummation of the exchange offer, will become holders of Shares, may be taxed in Norway in connection with the receipt of future dividend income from Transocean (see “Material Tax Considerations—Norwegian Taxation—Dividend Distributions”) and the transfer of Shares (see “Material Tax Considerations—Norwegian Tax Considerations—Taxation of Gains on Disposals of Shares”), as well as interest earned and gains realized on the exchangeable bond.

Notwithstanding the description of certain aspects of taxation in Norway in “Material Tax Considerations—Norwegian Taxation,” shareholders may be liable to tax in other jurisdictions. In particular, shareholders with tax residency in Norway may be subject to an unlimited or limited tax liability in other jurisdictions, and shareholders that are subject to a limited tax liability in Norway may be liable to tax in the jurisdiction in which they are resident. A non-Norwegian holder will however generally not be subject to Norwegian income tax on gain recognized on the exchange of Songa Shares pursuant to the Offer unless the gain is connected with the non-Norwegian holder’s conduct of or participation in a business activity managed or exercised in or out of Norway.

For a more complete description of certain Norwegian tax consequences of the Combination, see “Material Tax Considerations—Norwegian Taxation.”

This summary is not intended to be a replacement for, nor should it be considered as, legal or tax advice. Shareholders of Songa Offshore are therefore strongly advised to consult their tax advisors regarding the tax consequences related to participation in the Offer and the holding and disposal of Shares. The specific tax situation of each shareholder can only be adequately addressed by individual tax advice.

Q:   WHAT PERCENTAGE OF TRANSOCEAN SHARES WILL FORMER HOLDERS OF SONGA SHARES OWN AFTER THE COMBINATION?

A:   The existing shareholders in Transocean will be diluted by up to 28.1% as a consequence of the Offer and issuance of the Consideration Shares to the Songa Offshore shareholders, assuming the following:

·

the issuance of approximately 68.6 million Shares as Consideration Shares and approximately USD [●] million aggregate principal amount of Exchangeable Bonds in the Offer (which assumes that (i) all outstanding SONG07 convertible bonds and Songa Offshore warrants are converted to and exercised for Songa Shares and tendered in the Offer, (ii) the acceleration of vesting and settlement of all restricted stock units issued under the Songa Offshore Long-Term Incentive Plan in Songa Shares that are subsequently tendered in the Offer, (iii) 100% of  Songa Offshore

10


 

shareholders accept the Offer and (iv) no Songa shareholder elects the Cash Election), based upon an exchange ratio of 0.35724 Shares to be issued for each tendered Songa Share;

·

the issuance and subsequent exchange of approximately USD [●] million aggregate principal amount of Exchangeable Bonds to purchase certain outstanding Songa Offshore indebtedness in connection with the Combination; and

·

no additional capital increase by Songa Offshore is made after September 30, 2017.

Q:   IF THE OFFER IS COMPLETED, WILL THE CONSIDERATION SHARES AND THE EXCHANGEABLE BONDS ISSUED PURSUANT TO THE OFFER BE LISTED FOR TRADING?

A:   The Shares currently trade on the NYSE. Transocean will apply to list the Consideration Shares and the Exchangeable Bonds issued to Songa Offshore shareholders in the Offer on the NYSE. Consideration Shares and the Exchangeable Bonds will not be listed on any stock exchange in Norway. See “Risk Factors—Risks Related to the Shares” and “Risk Factors—Risks Related to the Exchangeable Bonds.”

Q:   DOES SONGA OFFSHORE SUPPORT THE OFFER AND THE COMBINATION?

A:   Yes. As a general rule, the board of directors of Songa Offshore is required to announce its view on the Offer in accordance with Section 6‑16 of the Norwegian Securities Trading Act no later than one week prior to the expiration of the Offer Period. As the Offer is initiated by Transocean in agreement with the board of directors of Songa Offshore, the Oslo Stock Exchange has instructed Songa Offshore to engage an independent advisor to issue a statement regarding the Offer pursuant to Section 6‑16 (4) of the Norwegian Securities Trading Act. Therefore Songa Offshore has engaged ABG Sundal Collier ASA to issue such independent statement on behalf of Songa Offshore. The independent statement is attached to this Prospectus as Annex D.

The board of directors of Songa Offshore has also issued a statement regarding the Offer; such statement is attached to this Prospectus as Annex E.

Q:   WHAT IS THE MARKET VALUE OF SONGA SHARES AS OF A RECENT DATE?

A:   The closing price of Songa Shares on the Oslo Stock Exchange on November 24, 2017 was NOK [   ].

Q:   IS TRANSOCEAN’S FINANCIAL CONDITION RELEVANT TO A SONGA OFFSHORE SHAREHOLDER’S DECISION TO TENDER ITS SONGA SHARES IN THE OFFER?

A:   Yes. Songa Offshore shareholders will receive Consideration Shares, Exchangeable Bonds and cash pursuant to the Cash Election (if applicable) in exchange for tendering their Songa Shares in the Offer. Therefore, Songa Offshore shareholders should consider Transocean’s financial condition before deciding to become a Transocean shareholder and a bondholder by accepting the Offer. Songa Offshore shareholders should also consider the effect that the Combination of Transocean and Songa Offshore may have on Transocean’s financial condition. In considering Transocean’s financial condition, Songa Offshore shareholders should review information relating to Transocean in this Prospectus, including the financial

11


 

information incorporated by reference in this Prospectus, which also contain detailed business, financial and other information about Transocean.

Q:   WHERE CAN SONGA OFFSHORE SHAREHOLDERS FIND MORE INFORMATION ABOUT TRANSOCEAN AND SONGA OFFSHORE?

A:   Songa Offshore shareholders can find out information about Transocean and Songa Offshore from the sources described under “Where You Can Find More Information.” For certain information regarding Songa Offshore’s business and financial condition, see the sections of this Prospectus titled “Description of the Songa Offshore Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Songa Offshore.”

Q:   WHO CAN SONGA OFFSHORE SHAREHOLDERS CONTACT WITH ADDITIONAL QUESTIONS ABOUT THE OFFER?

A:   Songa Offshore shareholders can call the Settlement Agent with additional questions about the Offer:

Clarksons Platou Securities AS

Munkedamsveien 62c

N‑0270 Oslo

Norway

+47 22 01 63 00

Email: ecm.oslo@clarksons.com

12


 

SUMMARY

This summary highlights the material information in this Prospectus. To more fully understand the Combination and for a more complete description of the terms of the Offer and the other transactions contemplated by the Transaction Agreement, you should read carefully this entire document, including the exhibits, annexes, and documents incorporated by reference herein. For information on how to obtain these documents, see Where You Can Find More Information.

The Combination (page [])

On August 13, 2017, Transocean entered into the Transaction Agreement with Songa Offshore, pursuant to which we are offering to acquire all of the Songa Shares through a voluntary tender offer in exchange for consideration per Songa Share consisting of (i) 0.35724 Consideration Shares issued by Transocean and (ii) USD 2.99726 principal amount of Exchangeable Bonds, to be issued by TINC and guaranteed by Transocean. As part of the Offer, each Songa Offshore shareholder may instead elect to receive the Cash Election in lieu of some or all of the Consideration Shares and Exchangeable Bonds such shareholder would otherwise be entitled to receive in the Offer. The aggregate amount of consideration paid to each Songa Offshore shareholder accepting the Offer shall be comprised, as near as possible, of 50% Consideration Shares and 50% Exchangeable Bonds, with any exercise by such shareholder of the Cash Election, if elected, being deducted first from the aggregate number of Exchangeable Bonds otherwise issuable to such shareholder and then from the aggregate number of Consideration Shares such shareholder would otherwise be entitled to receive in the Offer.

If the Offer is completed and we acquire Songa Shares representing 90% or more of the voting rights in Songa Offshore, we intend to initiate a compulsory acquisition (squeeze-out) of the remaining Songa Shares not owned by Transocean pursuant to article 36 of the Cyprus Takeover Bids Law (L.41(I)/2007), as amended, as soon as practicable following the completion of the Offer. A compulsory acquisition can be expected to be completed after 35 working days from completion of the Offer, provided that the required application is submitted to the Cyprus Securities and Exchange Commission immediately after completion and that the Cyprus Securities and Exchange Commission will make its decision on the application within 10 working days from its submission. It is expressly noted that this is an estimation only, as the process may be delayed due to several factors beyond the control of the Company. The Cyprus Securities and Exchange Commission is not subject to a time limit in deciding on the application, and no assurances can be given as to the exact duration of the compulsory acquisition process. See the section below “—Compulsory Acquisition” for further information.

Information About the Companies (see page [])

Transocean Ltd.

Transocean Ltd. is the parent company of the Transocean Group of companies. Transocean was incorporated under the laws of Switzerland in 2008. Transocean has evolved to become a leading international provider of offshore contract drilling services for oil and gas wells. Transocean has approximately 4,930 employees worldwide.

Transocean’s registered and principal executive offices are located at Turmstrasse 30, CH‑6300 Zug, Switzerland and its telephone number at that location is +41 (41) 749 0500.

13


 

Transocean Inc.

Transocean Inc. is a corporation incorporated under the Companies Law of the Cayman Islands. The legal and commercial name is Transocean Inc. TINC was established in 1999 and registered in the Cayman Islands under the business registration number 89645. TINC’s principal executive offices are located at P.O. Box 10342, 70 Harbour Drive, 4th Floor, Grand Cayman, KY1‑1003, and its telephone number is +1 345 745 4500.

Songa Offshore SE

Songa Offshore SE, the parent company of the Songa Offshore group of companies, is a European public company organized under the laws of the Republic of Cyprus. Its predecessor company, Songa Offshore ASA, was incorporated in 2005 as a Norwegian public limited liability company and converted to an SE, by means of a merger between Songa Offshore ASA and Songa Offshore Cyprus Plc, in 2008. The principal business of the Songa Group is to own and operate drilling rigs to be used in exploration and production drilling. The Songa Group operates in the international oil-service industry within the offshore drilling sector, and owns a fleet of seven semi-submersible rigs. The Songa Group has approximately 908 employees worldwide.

Songa Offshore’s registered and principal executive offices are located at the Porto Bello building, Office 201, No 1 Siafi Street, 3042, Limassol, Cyprus, and its telephone number at that location is +357 2520 7700.

Risk Factors (see page [])

The Combination, including the Offer, is subject to risks. You should carefully read and consider the risk factors in “Risk Factors” beginning on page [].

Terms of the Offer (see page [])

The summary below describes the principal terms and conditions of the Offer. Some of the terms and conditions described below are subject to important limitations and exceptions. You should carefully review “Terms of the Offer” and the Transaction Agreement, which contains a more detailed description of the terms and conditions to the Offer.

 

 

 

Issuer of Consideration Shares

Transocean Ltd.

Issuer of Exchangeable Bonds

TINC

Target

Songa Offshore SE

 

Subject Matter of the Offer

Transocean Ltd. seeks to acquire each of the issued and outstanding Songa Shares (on a fully diluted basis).

 

14


 

Consideration

For each Songa Share validly tendered in the Offer and not properly withdrawn, the Consideration will consist of a combination of the following:

1.    0.35724 Consideration Shares; and

2.    USD 2.99726 principal amount of the Exchangeable Bonds.

 

 

As part of the Offer, each Songa Offshore shareholder may instead elect the Cash Election in lieu of some or all of the Consideration Shares and Exchangeable Bonds such shareholder would otherwise be entitled to receive in the Offer.

Transocean will not issue any fractional Consideration Shares or fractional amounts of Exchangeable Bonds in the Offer. Each Songa Offshore shareholder who accepts the Offer and, following the completion of the Offer, any Songa Offshore shareholder in connection with a subsequent mandatory offer or compulsory acquisition (squeeze-out) (a) who would otherwise be entitled to receive a fraction of a Consideration Share will instead receive, for the fraction of a Consideration Share, an amount in cash based on the Reference Price, and (b) who would otherwise be entitled to receive a fractional amount of Exchangeable Bonds will instead receive, for the fractional amount of Exchangeable Bonds, an amount in cash based on USD 1,000, the principal amount per Exchangeable Bond, and in each case, paid in NOK, based on an exchange rate of 7.923 NOK per U.S. dollar which is the NOK/USD closing price at 4:00 p.m. CET as determined by Norges Bank, on August 14, 2017, the trading day immediately preceding the announcement of the Offer.

15


 

Adjustments to the Consideration

The number of Consideration Shares and Exchangeable Bonds shall each be adjusted appropriately to reflect the effect of any stock split, reverse stock split, stock dividend and other like change (including any dividend or distribution of securities exchangeable into Consideration Shares or Songa Shares), in accordance with the procedures set out in “Terms of the Offer—Amendments to the Offer.” If an adjustment is made, acceptances of the Offer received prior to such adjustment shall be deemed an acceptance of the Offer as revised.

 

 

Higher Consideration

Under the terms of the Offer, Transocean Ltd. (the “Offeror”) and any entity wholly owned directly or indirectly by Transocean shall not directly or indirectly acquire or enter into any agreement to acquire Songa Shares (in the open market or in privately negotiated transactions or otherwise) following announcement of the contemplated Offer until (i) the lapsing or withdrawal of the Offer or (ii) the completion of the Offer as contemplated by this Prospectus or, if relevant, expiration of a subsequent mandatory offer, at a consideration higher than the Offer Price without increasing the Offer Price for all Songa Shares included in the Offer so as to be at least equal to such higher consideration. Notwithstanding the foregoing, the Offer Price shall not be increased pursuant to the aforementioned as a result of (i) the payment of cash consideration (including the effect of any change in currency exchange rates) in any subsequent mandatory offer in accordance with the minimum Offer Price requirements as decided by the Oslo Stock Exchange, (ii) share price fluctuations during or after the Offer Period, as defined below, or (iii) the application of calculation principles by the Oslo Stock Exchange or any other governmental or regulatory authority to any subsequent mandatory offer that differs from the calculation principles specified in the Transaction Agreement.

16


 

Conditions for Completion of the Offer

The completion of the Offer is subject to the following conditions, each one of which may be waived by the Offeror fully or partly (at the Offeror’s sole discretion), provided, however, that condition (1) can only be waived to the extent the Offeror has received acceptances for more than 63% of the total share capital of Songa Offshore on a fully diluted basis (and cannot be waived if the Offeror has received acceptances for 63% or less of the total share capital of Songa Offshore on a fully diluted basis), and conditions (2), (6), (7), (8) or (11) can only be waived with the prior written consent of Songa Offshore:

 

 

1.    Minimum acceptance of more than 90%. On or prior to the expiration of the Offer Period, Songa Offshore shareholders shall in the aggregate have accepted the Offer subject to the terms and conditions of the Offer for a number of Songa Shares representing more than 90% of the total share capital of Songa Offshore, on a fully diluted basis (i.e., calculated based on the assumption that any and all outstanding warrants, convertible bonds and other securities convertible into or otherwise giving rights to new Songa Shares have been exercised in full regardless of the conditions for such exercise), and the same amount of votes, which can be exercised in the general meeting of Songa Offshore, and such acceptances shall remain valid and binding.

 

 

 

2.    Governmental and regulatory approvals. Any governmental, regulatory or other official approval and/or clearance, under any applicable laws or regulations, which are necessary for the completion of the Offer and the transactions contemplated hereunder, shall have been duly obtained without any conditions, unless such conditions are clearly insignificant in the context of (i) Transocean’s existing business operations in Norway or (ii) the expected benefits to Transocean of the acquisition of Songa Offshore.

 

 

 

3.    No intervention. No court or other governmental or regulatory authority of competent jurisdiction shall have taken any form of legal action (whether temporary, preliminary, or permanent) that restrains or prohibits the completion of the Offer or shall in connection with the Offer have imposed conditions upon Transocean, Songa Offshore or any of their respective subsidiaries, that Transocean in its sole discretion determines to be unduly burdensome.

 

4.    No issue of shares or equity instruments and no distributions. In the period from the announcement of the contemplated Offer until the settlement of the Offer there shall have been no changes or decisions to make changes to the share capital of Songa Offshore or its subsidiaries other than issuances of shares as required by the exercise

 

17


 

 

      of warrants or options or the conversion of convertible bonds and/or exercise of any other Songa Offshore securities, which are made in accordance with the terms of such agreements (which have been provided to Transocean prior to the entering into of the Transaction Agreement or the terms of which are otherwise publicly available) underlying such warrants, options, convertible bonds and/or other Songa Offshore securities and no issue or decision to issue any rights which entitle the holder to any form of equity interest in Songa Offshore or its subsidiaries, and Songa Offshore shall not have declared or made any dividends or other forms of distributions, in each case from the date of announcement of the contemplated Offer.

18


 

 

5.    No Material Adverse Change. Prior to completion of the Offer, there shall have been no Material Adverse Change. For these purposes, Material Adverse Change means any event, change, fact, condition, circumstance, development, occurrence or effect which, individually or together with any other event, change, fact, condition, circumstance, development, occurrence or effect, has, or would reasonably be expected to have, a material adverse effect upon (i) the condition (financial or otherwise), business, assets, liabilities or results of operations of Songa Offshore or Transocean, as the case may be, and its subsidiaries, taken as a whole, or (ii) the ability of Songa Offshore or Transocean, as the case may be, to perform its obligations under the Transaction Agreement or to consummate the Offer or the other transactions contemplated by the Transaction Agreement, provided that Material Adverse Change shall not be deemed to include an event, change, fact, condition, circumstance, development, occurrence or effect to the extent it relates to (A) the announcement of the Offer and the other transactions contemplated by the Offer; (B) the execution of, compliance with the terms of, or the taking of any action required by the Transaction Agreement, or the completion of the Offer and the other transactions contemplated by the Transaction Agreement; (C) any change in accounting requirements or principles or any change of laws of general applicability or the interpretation thereof, except to the extent disproportionally affecting Songa Offshore or Transocean, as the case may be, relative to peer companies operating in the industry, (D) changes in financial markets, interest rates, exchange rates, commodity prices or, except to the extent that such matters have an impact on Songa Offshore or Transocean, as the case may be, that to a material extent is disproportionate to the effect on other peer companies operating in the industry, other general economic conditions, (E) share price fluctuations or changes in third-party analyst estimates or projections (provided that the underlying cause of any such fluctuation or change may be considered in determining whether or not a Material Adverse Change has occurred or would reasonably be expected to occur to the extent not included in another exception herein), (F) acts of war, sabotage or terrorism, or any escalation or worsening of any such acts of war, sabotage or terrorism threatened or underway, except to the extent disproportionally affecting Songa Offshore or Transocean, as the case may be, relative to peer companies operating in the industry, (G) any changes resulting from non-cash impairment charges relating to the write-down or scrapping of existing oil rigs, or (H) with respect to Songa Offshore and its subsidiaries, (x) any matters reviewed as part of the due diligence conducted prior to the Transaction, including in particular any judgement, claim, development, fact circumstance or other

19


 

 

      occurrence in relation to Songa Offshore’s reported ongoing dispute with Daewoo Shipbuilding & Marine Engineering Co., Ltd. (“DSME”) and (y) any change in financial statements or other financial information or audit statements solely due to conversion of financial statements from IFRS to accounting principles generally accepted in the United States (“U.S. GAAP”) as part of the preparation or furnishing of information pursuant to the Transaction Agreement (provided that the underlying cause of any such changes (such as errors in accounting or material omissions) may be considered in determining whether or not a Material Adverse Change has occurred or would reasonably be expected to occur to the extent not included in another exception herein).

 

20


 

 

6.    Issue of Consideration Shares. (a) The extraordinary general meeting of the Transocean shareholders (the “Extraordinary General Meeting”) shall have approved (i) the issuance of the Consideration Shares and (ii) the creation of authorized share capital for the board of directors of Transocean (the “Transocean Board”) to be authorized to issue Shares in connection with a mandatory offer or a compulsory acquisition (if any) following the completion of the Offer, in each case with the necessary majority under Swiss law and Transocean’s articles of association (the “Articles of Association”), and (b) the Consideration Shares shall have been registered with the competent commercial register.

7.    Listing on NYSE. The NYSE shall have approved the Consideration Shares and the shares issuable upon exchange of the Exchangeable Bonds for listing on such exchange, subject to official notice of issuance.

 

 

8.    U.S. Securities Filings. One or more registration statements on Form S‑4 with respect to each of the Consideration Shares and the Exchangeable Bonds shall have been declared effective by the SEC, or a Form CB shall have been filed by Transocean with respect to the Offer.

 

 

9.    Accuracy of Provided Information. Nothing shall have come to the attention of the Offeror that has reasonably caused it to conclude that the information about Songa Offshore or its subsidiaries provided to the Offeror, whether provided by Songa Offshore or any of its representatives or contained in any publicly filed financial statement or stock exchange notice by Songa Offshore is, when viewed in context and together with all such information and reporting, inaccurate, misleading or incomplete (a) in any material respect or (b) in the case of information regarding the capitalization of Songa Offshore, other than for immaterial inaccuracies or omissions.

10.  Compliance with Covenants. Songa Offshore shall have complied in all material respects with its obligations under the Transaction Agreement, and no material breach by Songa Offshore of its representations and warranties under the Transaction Agreement shall have occurred.

 

 

 

21


 

 

11.  Election of the Perestroika Designee. Perestroika’s designee to serve on the Transocean Board (the “Perestroika Designee”) shall have been elected to the Transocean Board at the Extraordinary General Meeting.

Offer Period

The shareholders of Songa Offshore may accept the Offer in the period from and including [●] to and including [●], 2017 at 4:30 p.m. (CET) (as extended from time to time). Transocean may in its sole discretion, and subject to approval from the Oslo Stock Exchange, extend the Offer Period (one or more times), however not beyond [●], 2018 at 4:30 p.m. (CET). Any extensions of the Offer Period will be announced prior to the expiration of the Offer Period. When referring to the Offer Period in this Prospectus, this refers to the Offer Period as extended from time to time. If the Offer Period is extended, the other dates referred to herein may be changed accordingly and any received Acceptance Forms will remain binding for the length of the extension. Except as prohibited by the Transaction Agreement and applicable law, Transocean may, at its sole discretion and at any time, decide to cancel the Offer.

22


 

Long Stop Date

If the Offer has not become unconditional by 4:30 p.m. (CET) on the Long Stop Date, the Offer shall lapse and any tendered shares shall be released by Transocean, provided, however, that the Long Stop Date may be extended at the election of Transocean one time for no more than a total of 25 U.S. business days to the extent deemed necessary, at Transocean’s sole discretion, for the purpose of soliciting additional proxies from shareholders for the election at the Extraordinary General Meeting of the Perestroika Designee. With respect to any extension by Transocean, Transocean will, prior to such extension, publicly confirm the fulfilment of all other conditions for completion of the Offer (other than conditions (3), (4) and (9) in “—Conditions for Completion of the Offer”). However, with respect to condition (10) under “—Conditions for Completion of the Offer,” if a willful breach by Songa Offshore of any agreement or covenant in the Transaction Agreement occurs solely on or after the Long Stop Date, then such condition (10) shall not be satisfied and, in such event, Transocean reserves all of its rights with respect thereto (including completion of the Offer) to determine the satisfaction or waiver of such condition.

Settlement

The result of the Offer is expected to be published no later than the next business day following the expiration of the Offer Period (subject to possible extensions) in accordance with the procedures described under “Terms of the Offer—Notices.”

 

23


 

 

Transfer of the Songa Shares tendered to the settlement agent (who is authorized to transfer the shares to Transocean), and delivery of the Consideration Shares, Exchangeable Bonds and cash, as applicable, to Songa Offshore shareholders, in settlement of the Offer, will be made promptly following the expiration of the Offer Period and, in any case, no later than 15 U.S. business days after the expiration of the Offer Period. Accordingly, if the Offer Period expires on or about [●], we expect to issue and pay the Consideration Shares, Exchangeable Bonds and cash, as applicable, on or about [●]. We expect that the Consideration Shares and Exchangeable Bonds issued in the Offer will be listed as of the date when settlement occurs. If the Offer Period is extended, the settlement and listing dates will be similarly extended.

Upon contribution of the Songa Shares to the Company, (i) the relevant number of Consideration Shares and Exchangeable Bonds will be deposited with Computershare Trust Company, N.A. and Computershare, Inc., acting collectively as paying and distribution agent for the Offer (the “Distribution Agent”) and (ii) cash sufficient to pay all cash consideration and cash in lieu of fractional Consideration Shares and Exchangeable Bonds will be deposited with the settlement agent, in each case for distribution in accordance with the procedures described below to each Songa Offshore shareholder whose Songa Shares are acquired by the Company in the Offer.

 

 

 

Songa Offshore shareholders who have tendered shares in the Offer and not validly withdrawn such acceptance remain bound by their acceptance until settlement has occurred or Transocean notifies the Oslo Stock Exchange in accordance with the procedures set out in “Terms of the Offer—Notices” that the Offer has been cancelled.

 

Settlement Agent

Clarksons Platou Securities AS, Munkedamsveien 62c, N‑0270 Oslo, Norway, is the Settlement Agent in connection with the Offer.

 

 

Distribution Agent

Computershare Trust Company, N.A. and Computershare, Inc., 250 Royall Street, Canton, Massachusetts 02021, are the Distribution Agent in connection with the Offer.

 

Transocean’s Reasons for the Combination (see page [])

At a meeting held on August 11, 2017, after due consideration and consultation, the Transocean Board unanimously approved (i) the total consideration of NOK 47.50 per Songa Share and (ii) the Combination and the transactions contemplated thereby. In reaching its determination, the Transocean Board considered a

24


 

number of factors in connection with its evaluation of the proposed transaction, including significant strategic opportunities and potential synergies, as generally supporting its decision to enter into the Transaction Agreement and proceed with the transactions contemplated thereby. See “The Combination—Background and Reasons for the Combination—Transocean’s Reasons for the Combination” for a discussion of the factors considered by the Transocean Board.

Songa Offshore’s Reasons for the Combination (see page [●])

The Songa Board (with the exception of Songa Offshore directors Mr. Mohn and Mr. Mikkelsen, who were excused from voting on whether to approve the Transaction Agreement) unanimously determined to enter into the Transaction Agreement and recommend that Songa Offshore’s shareholders accept the Offer.  In addition to consulting with Songa Offshore management and its financial and legal advisors, the Songa Board considered a number of factors when evaluating the transaction. See “The Combination—Background and Reasons for the Combination—Songa Offshore’s Reasons for the Combination” for a discussion of the factors considered by the Songa Board.

The Transaction Agreement (see page [])

The terms and conditions of the Combination are contained in the Transaction Agreement, which is attached as Annex A to this Prospectus and incorporated into this Prospectus by reference. Transocean urges you to read the full text of the Transaction Agreement because it is the legal document between Transocean and Songa Offshore that governs the Combination.

Material Interests of Songa Offshore’s Board and Management in the Combination (see page [])

Some of the members of the Songa Offshore board of directors (the “Songa Board”) and the Songa Offshore executive officers may have interests in the Combination that are different from, or in addition to, the interests of the Songa Offshore shareholders. These interests may include, but are not limited to, the treatment of restricted share units or other equity instruments owned by certain Songa Offshore executive officers under Songa Offshore’s long-term incentive plan (the “Songa Offshore Long-Term Incentive Plan”), or cash severance and other benefits under change in control arrangements. Additionally, Songa Offshore’s executive officers are expected to continue their employment with the combined company under the terms of their current employment agreements following the closing of the Combination through December 31, 2017. These interests also include Transocean’s agreement to nominate the Perestroika Designee to the Transocean Board (subject to the election of Frederik W. Mohn, the Chairman of the Songa Board, as the Perestroika Designee at the Extraordinary General Meeting). As of August 14, 2017, members of the Songa Board and the Songa Offshore executive officers and their affiliates, excluding Perestroika AS (“Perestroika”), owned 361,160 Songa Shares in the aggregate, representing 0.3 percent of the issued Songa Shares. In addition, the Perestroika Designee is the sole owner of Perestroika, Songa Offshore’s largest shareholder. As of October 31, 2017, Perestroika held 59,489,590 Songa Shares and SONG07 convertible bonds convertible into 27,556,518 Songa Shares. Perestroika also holds approximately NOK 330 million principal amount of SONG04 bonds issued by Songa Offshore that will be purchased by Transocean at a price of 103.5% and a USD 50 million loan to Songa Offshore that will be purchased by Transocean at a price of 100%, each in connection with the completion and settlement of the Offer. See “Terms of the Offer—Refinancing of Certain Songa Offshore Indebtedness.

25


 

Comparison of Shareholders’ Rights (see page [])

The rights of Transocean shareholders are governed by Swiss law and Transocean’s Articles of Association. In addition, Transocean is subject to the rules and regulations of the SEC and the NYSE that, among other things, regulate the solicitation of proxies and provide for additional shareholder rights requirements. The rights of Songa Offshore shareholders are governed by Cyprus law and Songa Offshore’s memorandum of association and articles of association (“Songa’s Articles of Association”). Copies of Transocean’s Articles of Association and Songa’s Articles of Association are available, without charge, by following the instructions listed under “Where You Can Find More Information.”

As a result of the Combination, holders of Songa Shares will become shareholders of Transocean and their rights as shareholders will be governed by Swiss law and Transocean’s Articles of Association. There are many differences between the rights of Songa Offshore shareholders and those of Transocean shareholders.

Material Tax Considerations of the Combination (see page [])

Tax matters are very complicated, and the tax consequences of the Offer to a particular holder will depend in part on such holder’s circumstances. Accordingly, holders of Songa Shares are urged to consult their own tax advisors for a full understanding of the tax consequences of the Offer to them, including the applicability of United States federal, state, local and foreign income and other tax laws.

Certain Material U.S. Income Tax Considerations

The exchange of Songa Shares for Consideration Shares and Exchangeable Bonds (and, to the extent shareholders elect the Cash Election, cash) pursuant to the Offer will be a taxable transaction for United States federal income tax purposes. U.S. holders of Songa Shares that participate in the Offer generally will recognize gain or loss equal to the difference, if any, between (i) the sum of (A) the fair market value of any Consideration Shares received in the Offer, determined in U.S. dollars, plus (B) the issue price, as determined for United States federal income tax purposes, of the Exchangeable Bonds received in the Offer, plus (C) the U.S. dollar amount of any cash received in Norwegian kroner in the Offer, plus (D) any cash received for any fractional Consideration Shares or Exchangeable Bonds and (ii) such U.S. holder’s adjusted tax basis in the Songa Shares exchanged. Provided that Songa Offshore is not treated as a passive foreign investment company for U.S. federal income tax purposes, any gain or loss recognized by a U.S. holder in connection with the Offer generally will be treated as capital gain or loss.

A non-U.S. holder will generally not be subject to United States federal income tax on gain recognized on the exchange of Songa Shares pursuant to the Offer unless the gain is “effectively connected” with the non-U.S. holder’s conduct of a trade or business in the United States or the non-U.S. holder is an individual present in the United States for 183 or more days in the taxable year of the exchange, and certain other requirements are met.

The foregoing is a brief summary of United States federal income tax consequences only and is qualified by the description of United States federal income tax considerations in “Material Tax Considerations—United States Taxation.”

26


 

Certain Material Norwegian Tax Considerations

The exchange of Songa Shares for Consideration Shares, Exchangeable Bonds (and, to the extent shareholders elect the Cash Election, cash) pursuant to the Offer will be a taxable transaction for Norwegian income tax purposes for individual shareholders, while for corporate shareholders the transaction is expected to normally be tax exempt under the Norwegian exemption method. Norwegian individual holders of Songa Shares that participate in the Offer generally will recognize gain or loss equal to the difference, if any, between (i) the sum of (A) the fair market value of any Consideration Shares received in the Offer, determined in NOK, plus (B) the issue price, as determined for Norwegian income tax purposes, of the Exchangeable Bonds received in the Offer, plus (C) the amount of any cash received in Norwegian kroner received in the Offer and (ii) such individual Norwegian holder’s tax basis in the Songa Shares exchanged. Any gain or loss recognized by a Norwegian holder in connection with the Offer generally will be treated as capital gain or loss.

A non-Norwegian holder will generally not be subject to Norwegian income tax on gain recognized on the exchange of Songa Shares pursuant to the Offer unless the gain is connected with the non-Norwegian holder’s conduct of or participation in a business activity managed or exercised in or out of Norway.

The foregoing is a brief summary of Norwegian tax consequences only and is qualified by the description of Norwegian tax considerations in “Material Tax Considerations—Norwegian Taxation.”

Certain Material Swiss Tax Considerations

The exchange of Songa Shares for the Consideration is not subject to Swiss Federal withholding tax. The exchange of Songa Shares for the Consideration may be subject to Swiss securities transfer tax of up to 0.3 per cent. If such transfer tax will be due, it will be borne by Transocean.

The foregoing is a brief summary of Swiss tax consequences only and is qualified by the description of Swiss tax considerations in “Material Tax Considerations—Swiss Taxation.”

Terms of the Exchangeable Bonds

The following overview provides a summary of the main terms applicable to the Exchangeable Bonds. The full terms in respect of the Exchangeable Bonds are described in further detail under “Description of Transocean Exchangeable Bonds.”

 

 

Issuer

Transocean Inc.

Guarantor

Transocean Ltd.

Securities Offered

USD [●] aggregate principal amount of 0.5% Exchangeable Senior Bonds due 2022.

Currency

USD.

ISIN/CUSIP

[●].

27


 

Interest Rate/Yield

0.5% per annum. Interest on the Exchangeable Bonds will be calculated on the basis of a 360-day year consisting of twelve 30-day months.

Maturity Date

[●], 2022.

 

Permitted Denominations

USD 1,000.

 

Amortization

Amortization in full on the Maturity Date.

Ranking

The Exchangeable Bonds will constitute senior unsecured debt of TINC and will rank:

●    equally with its senior unsecured debt from time to time outstanding;

●    senior to its subordinated debt from time to time outstanding; and

●    effectively junior to its secured debt and to all debt and other liabilities of its subsidiaries from time to time outstanding.

Transocean’s guarantee will rank equally with all of its other unsecured and subordinated debt from time to time outstanding.

Guarantee

All present and future obligations of TINC under the Exchangeable Bonds are guaranteed in full by Transocean. The guarantee is unconditional.

Principal Amount

Up to USD [●] principal amount of Exchangeable Bonds will be issued in the Offer and up to USD [●] principal amount of Exchangeable Bonds will be issued in connection with the refinancing of certain Songa Offshore indebtedness as described under “Terms of the Offer—Refinancing of Certain Songa Offshore Indebtedness.” Exchangeable Bonds issued in connection with the refinancing of that Songa Offshore indebtedness will initially be issued as restricted securities for U.S. regulatory purposes and will initially bear a different CUSIP securities identifier than the Exchangeable Bonds issued in the Offer. Additionally, any Exchangeable Bonds issued in exchange for Songa Shares in any compulsory acquisition following the Offer may not be fungible for trading purposes with Exchangeable Bonds issued in the Offer (in which case they would bear a different CUSIP securities identifier).

Interest Payment Dates

[●] and [●] of each year, beginning [●], 2018.

Exchange Rights

Unless previously exchanged, purchased or cancelled, holders may exchange their Exchangeable Bonds at the applicable exchange rate for the Shares at any time after the initial issue date and prior to the close of business on the business day immediately preceding the maturity date.

28


 

Additional Amounts

Subject to specified exceptions, if the issuer or guarantor is required by law to withhold any tax from any payment in respect of the Exchangeable Bonds the amount of the payment due will be grossed up to such amount as is (after giving effect to the required withholding) equal to the payment that would have been received if no withholding had been required.

If a Tax Event (as defined below) occurs and a holder of the Exchangeable Bonds does not elect to exchange, or cause repurchase of, its Exchangeable Bonds following such Tax Event, neither Transocean nor TINC will be required to pay additional amounts with respect to payments made in respect of such Exchangeable Bonds following such Tax Event, and all subsequent payments in respect of such Exchangeable Bonds will be subject to any tax required to be withheld or deducted under the laws of a relevant taxing jurisdiction.

Exchange Rate

The exchange rate will be 97.29756 Shares per USD 1,000 principal amount of Exchangeable Bonds, subject to adjustment as described below.

Exchange Settlement

Transocean will settle each USD 1,000 principal amount of Exchangeable Bonds surrendered for exchange by delivering, on the third trading day immediately following the exchange date (or, in the case of an exchange in connection with a Fundamental Change (as defined below), on the fifth trading day immediately following the exchange date), a number of Shares equal to the exchange rate in effect on the exchange date. Cash will be delivered in lieu of any fractional shares.

29


 

Adjustments to Exchange Rate

The exchange rate will be adjusted in the following circumstances:

If a holder elects to exchange its Exchangeable Bonds in connection with a Fundamental Change (as defined below) or a Tax Event (as defined below), the exchange rate applied to that exchange will be increased based on the make-whole premium applicable to the Fundamental Change or Tax Event.

For exchanges in connection with a Fundamental Change due to a Change of Control (as defined below), the increased exchange rate will be determined as follows:

COCER         =     OER multiplied by (1 +(EP x (c/t))), where

COCER         =     Exchange Rate applicable to exchanges in connection with the applicable Change of Control

OER              =     Exchange Rate otherwise applicable at such time, before giving effect to the increase resulting from the applicable Change of Control

EP                 =     22.50%

c                    =     the number of days from and including the date of the Fundamental Change to but excluding the maturity date

t                    =     the number of  days from and including the issue date to but excluding the maturity date

For exchanges in connection with a Fundamental Change due to a Listing Failure Event, the increased exchange rate will be determined as follows:

LFER            =     OER multiplied by (1 +(EP x (c/t))), where

LFER            =     Exchange Rate applicable to exchanges in connection with the applicable Listing Failure Event

OER              =     Exchange Rate otherwise applicable at such time, before giving effect to the increase resulting from the applicable Listing Failure Event

EP                 =     22.50%

 

30


 

 

c                    =     the number of days from and including the date of the listing failure event to but excluding the maturity date

t                     =     the number of  days from and including the issue date to but excluding the maturity date

For exchanges in connection with a Tax Event, the number of additional shares will be determined as follows:

TEER            =     OER multiplied by (1 +(EP x (c/t))), where

TEER            =      Exchange Rate applicable to exchanges in connection with the applicable Tax Event

31


 

 

OER              =     Exchange Rate otherwise applicable at such time, before giving effect to the increase resulting from the applicable Tax Event

EP                 =     22.50%

c                    =     the number of days from and including the date of the Tax Event to but excluding the maturity date

t                     =    the number of  days from and including the issue date to but excluding the maturity date

The indenture also includes customary exchange rate adjustments for certain corporate events, including dividends, stock splits and recapitalizations of the guarantor.

Redemption of the Exchangeable Bonds at TINC’s Option

TINC will have no option to redeem the Exchangeable Bonds.

Repurchase of the Exchangeable Bonds at the Option of the Holder

Holders of the Exchangeable Bonds will have the right to require TINC to repurchase all or a portion of such holder’s Exchangeable Bonds upon a Fundamental Change or upon the occurrence of certain adverse changes in tax laws resulting in a Tax Event Offer to Repurchase.

In the event of a Fundamental Change due to a Change of Control Event, Exchangeable Bonds will be repurchased at a price in cash equal to 101% of the principal amount of the Exchangeable Bonds to be repurchased, plus any accrued and unpaid interest to, but excluding, the repurchase date.

In the event of a Fundamental Change due to a Listing Failure Event, or of a Tax Event Offer to Repurchase, Exchangeable Bonds will be repurchased at a price in cash equal to 100% of the principal amount of the Exchangeable Bonds to be repurchased, plus any accrued and unpaid interest to, but excluding, the repurchase date.

In the event of any repurchase due to a Fundamental Change, settlement of any exchange will be five business days following the exchange date.

32


 

Use of Proceeds

The Company will not receive any cash proceeds from the Offer. The Exchangeable Bonds will serve as:

     part settlement of the purchase of NOK [●] Senior Unsecured Callable Bond issued by Songa Offshore under ISIN NO0010628753 (SONG04);

     part settlement of the purchase of NOK [●] Senior Unsecured Callable Bond issued by Songa Offshore under ISIN NO0010649403 (SONG05);

     settlement of the purchase of USD 50,000,000 loan provided by Perestroika AS to Songa Offshore; and

     part consideration for Transocean’s acquisition of the shares of Songa Offshore.

 

Global  Form

The Exchangeable Bonds will be evidenced by one or more global securities deposited with the trustee as custodian for DTC. The global securities will be registered in the name of Cede & Co., as DTC’s nominee.

Material U.S. Federal Income Tax Considerations

You should consult your tax advisor with respect to the U.S. federal income tax consequences of owning the Exchangeable Bonds and the Shares into which the Exchangeable Bonds may be exchanged in light of your own particular situation and with respect to any tax consequences arising under the laws of any state, local, foreign or other taxing jurisdiction. See “Material Tax Considerations.”

Listing of the Exchangeable Bonds

TINC intends to apply to list the Exchangeable Bonds on the NYSE and will cause the Exchangeable Bonds to be listed on that exchange or Nasdaq within 60 days of their initial issue date. The guarantor’s shares are listed for trading on the NYSE under the ticker symbol “RIG.”

 

Trustee and Paying Agent

Wells Fargo Bank, National Association will serve as trustee (the “Trustee”), paying agent (the “Paying Agent”) and exchange agent (the “Exchange Agent”) with regard to the Exchangeable Bonds. The Trustee, Paying Agent and Exchange Agent is not a representative of the holders of the Exchangeable Bonds. The Trustee, Paying Agent and Exchange Agent will act only in accordance with the requirements of the indenture governing the Exchangeable Bonds.

 

Governing Law and Jurisdiction

New York law will govern the indenture and the Exchangeable Bonds.

 

33


 

SUMMARY SELECTED FINANCIAL DATA OF TRANSOCEAN

The selected financial data as of December 31, 2016 and 2015 and for each of the three years in the period ended December 31, 2016 have been derived from the audited consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of Transocean’s annual report on Form 10‑K for the year ended December 31, 2016 (the “2016 Annual Report”). The selected financial data as of December 31, 2014, 2013 and 2012, and for each of the two years in the period ended December 31, 2013 have been derived from Transocean’s accounting records. The selected financial data as of September 30, 2017 and for the nine-month periods ended September 30, 2017 and 2016 have been derived from the unaudited condensed consolidated financial statements included in “Item 1. Financial Statements” of Transocean’s quarterly report on Form 10‑Q for the quarterly period ended September 30, 2017 (the “3Q17 Quarterly Report”).

The selected financial data should be read in conjunction with the sections titled “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the audited consolidated financial statements and the notes thereto included under “Item 8. Financial Statements and Supplementary Data” of the 2016 Annual Report, “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the unaudited condensed consolidated financial statements and notes thereto included in “Item 1. Financial Statements” of the 3Q17 Quarterly Report and Transocean’s financial statements and related notes and other financial information incorporated by reference in this Prospectus.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended
September 30,

 

Years ended December 31,

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

    

2017

    

2016

    

2016(1)

    

2015

    

2014(2)

    

2013

    

2012

 

 

 

(In millions of U.S. dollars, except per share data)

 

Statement of operations data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

 

$

2,344

 

$

3,187

 

$

4,161 

 

$

7,386 

 

$

9,185 

 

$

9,246 

 

$

8,942 

 

Operating income (loss)

 

 

(2,516)

 

 

816

 

 

1,132 

 

 

1,365 

 

 

(1,347)

 

 

2,203 

 

 

1,588 

 

Income (loss) from continuing operations

 

 

(2,995)

 

 

570

 

 

827 

 

 

895 

 

 

(1,880)

 

 

1,428 

 

 

765 

 

Net income (loss)

 

 

(2,995)

 

 

570

 

 

827 

 

 

897 

 

 

(1,900)

 

 

1,437 

 

 

(278)

 

Net income (loss) attributable to controlling interest

 

 

(3,016)

 

 

535

 

 

778 

 

 

865 

 

 

(1,839)

 

 

1,434 

 

 

(291)

 

Per share earnings (loss) from continuing operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(7.72)

 

$

1.44

 

$

2.08 

 

$

2.36 

 

$

(5.02)

 

$

3.92 

 

$

2.11 

 

Diluted

 

 

(7.72)

 

 

1.44

 

 

2.08 

 

 

2.36 

 

 

(5.02)

 

 

3.92 

 

 

2.11 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance sheet data (at end of period)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

22,441

 

 

 

 

$

26,889 

 

$

26,431 

 

$

28,676 

 

$

32,759 

 

$

34,534 

 

Debt due within one year

 

 

799

 

 

 

 

 

724 

 

 

1,093 

 

 

1,032 

 

 

323 

 

 

1,365 

 

Long-term debt

 

 

6,501

 

 

 

 

 

7,740 

 

 

7,397 

 

 

9,019 

 

 

10,329 

 

 

11,035 

 

Total equity

 

 

12,803

 

 

 

 

 

15,805 

 

 

15,000 

 

 

14,104 

 

 

16,719 

 

 

15,803 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other financial data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash provided by operating activities

 

$

887

 

$

1,278

 

$

1,911 

 

$

3,445 

 

$

2,220 

 

$

1,918 

 

$

2,708 

 

Cash used in investing activities

 

 

(46)

 

 

(1,056)

 

 

(1,313)

 

 

(1,932)

 

 

(1,828)

 

 

(1,658)

 

 

(389)

 

Cash provided by (used in) financing activities

 

 

(1,176)

 

 

(27)

 

 

115 

 

 

(1,809)

 

 

(1,000)

 

 

(2,151)

 

 

(1,202)

 

Capital expenditures

 

 

386

 

 

1,072

 

 

1,344 

 

 

2,001 

 

 

2,165 

 

 

2,238 

 

 

1,303 

 

Distributions of qualifying additional paid-in capital

 

 

 

 

 

 

 

 

381 

 

 

1,018 

 

 

606 

 

 

276 

 

Per share distributions of qualifying additional paid-in capital

 

 

 

 

 

 

 

 

1.05 

 

 

2.81 

 

 

1.68 

 

 

0.79 

 


(1)

In December 2016, as contemplated by the Agreement and Plan of Merger, dated July 31, 2016 (the “2016 Agreement and Plan of Merger”), Transocean Partners LLC (“Transocean Partners”) and one of our subsidiaries completed the merger, with Transocean Partners becoming a wholly owned indirect subsidiary of Transocean. Each Transocean Partners common unit that was issued and outstanding immediately prior to the closing, other than units held by Transocean and its subsidiaries, was converted into the right to receive 1.20 of our shares. To complete the merger, we issued 23.8 million shares from conditional capital.

In August 2014, Transocean completed an initial public offering to sell a noncontrolling interest in Transocean Partners, which was formed on February 6, 2014, by Transocean Partners Holdings Limited, a Cayman Islands company and our wholly owned subsidiary.

34


 

SUMMARY SELECTED FINANCIAL DATA OF SONGA OFFSHORE

The following table sets forth selected historical consolidated financial information for Songa Offshore. The selected consolidated financial data of Songa Offshore as of and for the year ended December 31, 2016 has been derived from Songa Offshore’s audited consolidated financial statements as of and for the year ended December 31, 2016 (the “Songa Consolidated Financial Statements”) included elsewhere in this Prospectus, which have been prepared in accordance with International Financial Reporting Standards (the “IFRS”), as issued by the International Accounting Standards Board (the “IASB”). The selected consolidated financial data of Songa Offshore as of December 31, 2015 and for each of the two years in the period then ended has been derived from Songa Offshore’s unaudited consolidated financial statements included in this Prospectus, which have been prepared in accordance with IFRS, as issued by the IASB. The financial information presented of Songa Offshore as of December 31, 2014, 2013 and 2012, and for each of the two years in the period ended December 31, 2013 has been derived from the accounting records of Songa Offshore.

The financial information presented for Songa Offshore is not directly comparable to the financial data of Transocean because Transocean’s consolidated financial statements have been prepared in accordance with U.S. GAAP. The selected historical consolidated financial information of Songa Offshore as of September 30, 2017 and for the nine-month periods ended September 30, 2017 and 2016 have been derived from the unaudited interim condensed consolidated financial statements of Songa Offshore included elsewhere in this Prospectus, which have been prepared in accordance with IFRS, as issued by the IASB. The unaudited financial statements include all adjustments, consisting of normal recurring accruals, which Songa Offshore considers necessary for a fair presentation of the financial position and the results of operations for these periods. The selected historical consolidated financial information of Songa Offshore presented below is not necessarily indicative of the results of operations or financial condition that may be expected for any future period or date. The selected historical consolidated financial information presented below should be read in conjunction with Songa Offshore’s audited consolidated financial statements and unaudited interim condensed consolidated financial statements and notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Songa Offshore” included in this Prospectus.

 

 

Nine months ended
September 30,

 

Years ended December 31,

 

 

 

(unaudited)

 

 

 

(unaudited)

 

 

    

2017

    

2016

    

2016(1)

    

2015

    

2014

    

2013

    

2012

 

 

 

(In millions of U.S. dollars, except per share data)

 

Income statement data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$

509 

 

$

566 

 

$

753 

 

$

513 

 

$

495 

 

$

562 

 

$

585 

 

Operating expenses(2)

 

 

(213)

 

 

(223)

 

 

(303)

 

 

(231)

 

 

(298)

 

 

(350)

 

 

(394)

 

Depreciation

 

 

(138)

 

 

(132)

 

 

(177)

 

 

(126)

 

 

(114)

 

 

(140)

 

 

(124)

 

Impairment

 

 

(7)

 

 

(118)

 

 

(145)

 

 

(521)

 

 

(65)

 

 

(92)

 

 

(330)

 

Profit (loss) before tax

 

 

37 

 

 

(13)

 

 

(47)

 

 

(432)

 

 

(57)

 

 

(102)

 

 

(295)

 

Income tax (expense) credit

 

 

(1)

 

 

 

 

(41)

 

 

(37)

 

 

 

 

(57)

 

 

(10)

 

Profit (loss) for the year

 

 

36 

 

 

(11)

 

 

(88)

 

 

(470)

 

 

(57)

 

 

(159)

 

 

(305)

 

Earnings (loss) per share, basic(3)

 

 

0.30 

 

 

(0.17)

 

 

(1.12)

 

 

(44.25)

 

 

(5.38)

 

 

(0.74)

 

 

(1.59)

 

Earnings (loss) per share, diluted(3)

 

 

0.21 

 

 

(0.17)

 

 

(1.12)

 

 

(44.25)

 

 

(5.38)

 

 

(0.74)

 

 

(1.59)

 

Weighted average number of shares at year end (000)(3)

 

 

122,302

 

 

66,637

 

 

78,239 

 

 

10,616 

 

 

10,524 

 

 

216,319 

 

 

191,660 

 


(1)

Songa Offshore’s audited consolidated financial statements as of and for the year ended December 31, 2016 have been adjusted for the effects of the restatement more fully described in note 3 to the Songa Consolidated Financial Statements included in this Prospectus.

(2)

Operating expenses includes general and administrative expenses and reimbursable costs for the period presented.

35


 

(3)

Songa Offshore performed a 100:1 reverse share split on December 12, 2016. The share split was retrospectively applied to the 2015 and 2014 unaudited annual comparative periods presented in the Songa Consolidated Financial Statements included elsewhere in this Prospectus. The reserve share split affects comparability of the basic and diluted EPS between years. Refer to Note 13 “Earnings per share” and Note 20 “Issued capital” of the Songa Offshore 2016 consolidated financial statements included elsewhere in this Prospectus for further information on the reverse share split and earnings per share calculation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

Years ended December 31,

 

 

 

(unaudited)

 

 

(unaudited)

 

 

    

2017

    

2016(1)

    

2015

    

2014

    

2013

    

2012

 

 

 

(In millions of U.S. dollars, except per share data)

 

Balance sheet data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

125 

 

$

176 

 

$

168 

 

$

236 

 

$

440 

 

$

38 

 

Rigs, machinery and equipment

 

 

2,972

 

 

3,092 

 

 

1,964 

 

 

1,063 

 

 

1,028 

 

 

1,372 

 

Newbuilds

 

 

— 

 

 

— 

 

 

869 

 

 

731 

 

 

583 

 

 

507 

 

Current assets

 

 

261 

 

 

305 

 

 

295 

 

 

332 

 

 

743 

 

 

748 

 

Current liabilities

 

 

(332)

 

 

(377)

 

 

(445)

 

 

(391)

 

 

(512)

 

 

(715)

 

Working capital

 

 

(71)

 

 

(72)

 

 

(150)

 

 

(59)

 

 

231 

 

 

33 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

$

(2,427)

 

$

(2,652)

 

$

(2,677)

 

$

(1,271)

 

$

(1,358)

 

$

(1,792)

 

Total assets

 

 

3,247 

 

 

3,412 

 

 

3,250 

 

 

2,307 

 

 

2,439 

 

 

2,739 

 

Total equity

 

 

820 

 

 

760 

 

 

573 

 

 

1,036 

 

 

1,081 

 

 

947 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flow from operating activities

 

$

221 

 

$

318 

 

$

144 

 

$

42 

 

$

46 

 

$

306 

 

Cash flow (used in)/from investing activities

 

 

(23)

 

 

(595)

 

 

(1,649)

 

 

(126)

 

 

367 

 

 

(735)

 

Cash flow (used in)/from financing activities

 

 

(235)

 

 

329 

 

 

1,374 

 

 

(113)

 

 

(19)

 

 

381 

 


(1)

Songa Offshore’s audited consolidated financial statements as of and for the year ended December 31, 2016 have been adjusted for the effects of the restatement more fully described in note 3 to the Songa Consolidated Financial Statements included in this Prospectus.

 

36


 

UNAUDITED COMPARATIVE PER SHARE DATA

The table below summarizes unaudited per share information for Transocean and Songa Offshore on a historical basis. You should read the information below together with the financial statements and related notes of Transocean incorporated by reference and the financial statements and related notes of Songa Offshore appearing elsewhere in this Prospectus.

The information below is being provided for informational purposes only. You should not rely on this historical information as being indicative of the future results of operations data as of any future date or for any future period. The historical net book value per share is computed by dividing total shareholders’ equity by the number of shares outstanding at the end of the period.

 

 

 

 

 

 

 

 

 

    

Nine months ended
September 30, 2017

    

Year ended
December 31, 2016

 

Transocean historical per share data

 

 

 

 

 

 

 

Basic earnings (loss) per share

 

$

(7.72)

 

$

2.08 

 

Diluted earnings (loss) per share

 

$

(7.72)

 

$

2.08 

 

Cash dividends declared per share

 

$

 

$

 

Net book value per share (at end of period)

 

$

32.72

 

$

40.58

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Songa Offshore historical per share data (continuing operations)(1)

 

Nine months ended
September 30, 2017

 

Year ended
December 31, 2016

 

Basic earnings/(loss) per share

 

$

0.30 

 

$

(1.12)

 

Diluted earnings/(loss) per share

 

$

0.21 

 

$

(1.12)

 

Cash dividends declared per share

 

$

 

$

 

Net book value per share (at end of period)

 

$

5.96 

 

$

6.74 

 


(1)

Derived from Songa Offshore’s historical financial statements presented under IFRS as issued by the IASB included elsewhere in this Prospectus.

37


 

COMPARATIVE MARKET PRICE AND DIVIDEND INFORMATION

Comparative Historical Market Price Information

The Shares are listed for trading on the NYSE under the symbol “RIG.” Songa Shares are listed for trading on the Oslo Stock Exchange under the symbol “SONG.”

The following table sets forth the high and low reported sale prices for Shares and Songa Shares, as well as the dividends declared for the shares of each, as applicable, for the periods shown as reported on the NYSE or the Oslo Stock Exchange, respectively.

As of October 31, 2017, there were 391,213,324 Shares outstanding, which excludes 3,588,666 issued shares that are held by Transocean or its subsidiaries, and 137,641,567 Songa Shares outstanding. As of such date, Transocean had 6,052 shareholders of record and Songa Offshore had [] shareholders of record.