DEFM14A 1 d315020ddefm14a.htm DEFM14A DEFM14A
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

 

 

Filed by the Registrant  ☒

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

Preliminary Proxy Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material under §240.14a-12

NOBLE CORPORATION

(Exact name of registrant as specified in its charter)

N/A

(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

No fee required

 

Fee paid previously with preliminary materials

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11

 

 

 


Table of Contents

PROXY STATEMENT AND PROSPECTUS

LETTER TO SHAREHOLDERS OF NOBLE CORPORATION

Noble Corporation

13135 Dairy Ashford, Suite 800

Sugar Land, Texas 77478

Dear Noble Corporation Shareholders:

You are cordially invited to attend an extraordinary general meeting of Noble Corporation, an exempted company incorporated in the Cayman Islands with limited liability (“Noble”), which will be held on May 10, 2022 at 9:00 a.m., Central Time, at NobleAdvances Training and Collaboration Center, 12550 Reed Rd., Ste. 200, Sugar Land, Texas 77478 (the “General Meeting”).

On November 10, 2021, Noble entered into a Business Combination Agreement (the “Business Combination Agreement”) with Noble Finco Limited, a private limited company formed under the laws of England and Wales and an indirect, wholly owned subsidiary of Noble (“Topco”), Noble Newco Sub Limited, a Cayman Islands exempted company and a direct, wholly owned subsidiary of Topco (“Merger Sub”), and The Drilling Company of 1972 A/S, a Danish public limited liability company (“Maersk Drilling”), pursuant to which, among other things, (i) (x) Noble will merge with and into Merger Sub (the “Merger”), with Merger Sub surviving the Merger as a wholly owned subsidiary of Topco and (y) the ordinary shares, par value $0.00001 per share, of Noble (“Noble Shares”) will convert into an equivalent number of A ordinary shares, par value $0.00001 per share, of Topco (the “Topco Shares”), and (ii) (x) Topco will make a voluntary tender exchange offer to Maersk Drilling’s shareholders (the “Offer” and, together with the Merger and the other transactions contemplated by the Business Combination Agreement, the “Business Combination”) and (y) upon the consummation of the Offer, if more than 90% of the issued and outstanding shares of Maersk Drilling, nominal value DKK 10 per share (“Maersk Drilling Shares”) are acquired by Topco, Topco will redeem any Maersk Drilling Shares not exchanged in the Offer by Topco for, at the election of the holder, either Topco Shares or cash (or, for those holders that do not make an election, only cash), under Danish law by way of a compulsory purchase.

At the General Meeting, Noble shareholders will be asked to consider and vote upon: (i) a proposal, as a special resolution (the “Business Combination Proposal”), to approve the Business Combination between Noble and Maersk Drilling, which will be effected through the Business Combination Agreement, a copy of which is attached to the accompanying proxy statement/prospectus as Annex A, (ii) a proposal, as an ordinary resolution (the “NYSE Proposal”), to approve, for purpose of complying with the applicable listing rules of The New York Stock Exchange (the “NYSE”), the issuance of the Topco Shares in connection with the Business Combination, and (iii) a proposal, as an ordinary resolution (the “Advisory Compensation Proposal” and collectively, with the Business Combination Proposal and the NYSE Proposal, the “Business Combination Proposals”), to approve, on a non-binding advisory basis, certain compensation that may be paid or become payable to Noble’s named executive officers that is based on or otherwise relates to the Business Combination.

As further described in the accompanying proxy statement/prospectus, at the effective time of the Merger (the “Merger Effective Time”), subject to the terms and conditions set forth in the Business Combination Agreement:

 

   

each Noble Share issued and outstanding immediately prior to the Merger Effective Time will be converted into one newly and validly issued, fully paid and non-assessable Topco Share;

 

   

each penny warrant to purchase Noble Shares issued and outstanding immediately prior to the Merger Effective Time will cease to represent the right to acquire Noble Shares and shall be automatically cancelled, converted into and exchanged for a number of Topco Shares equal to the number of Noble Shares underlying such penny warrant, rounded to the nearest whole share;

 

   

each warrant to purchase Noble Shares (other than penny warrants) issued and outstanding immediately prior to the Merger Effective Time will be converted automatically into a warrant to


Table of Contents
 

acquire a number of Topco Shares equal to the number of Noble Shares underlying such warrant, with the same terms as were in effect immediately prior to the Merger Effective Time under the terms of the applicable warrant agreement; and

 

   

each award of restricted share units representing the right to receive Noble Shares, or value based on the value of Noble Shares (each, a “Noble RSU Award”) that is outstanding immediately prior to the Merger Effective Time will cease to represent a right to acquire Noble Shares (or value equivalent to Noble Shares) and will be exchanged for restricted share units representing the right to acquire, on the same terms and conditions as were applicable under the Noble RSU Award (including any vesting conditions), that number of Topco Shares equal to the number of Noble Shares subject to such Noble RSU Award immediately prior to the Merger Effective Time.

As further described in the exchange offer prospectus and subject to the terms and conditions set forth in the Business Combination Agreement, following the approval of certain regulatory filings with the DFSA, Topco has agreed to commence the Offer to acquire up to 100% of the then outstanding Maersk Drilling Shares and voting rights of Maersk Drilling, not including any treasury shares held by Maersk Drilling. The Offer is conditioned upon, among other things, holders of at least 80% of the then outstanding Maersk Drilling Shares and voting rights of Maersk Drilling tendering their shares in the Offer (which percentage may be lowered by Topco in its sole discretion to not less than 70%). In the Offer, Maersk Drilling shareholders may exchange each Maersk Drilling Share for 1.6137 newly and validly issued, fully paid and non-assessable Topco Shares (the “Exchange Ratio”), and will have the ability to elect cash consideration for up to $1,000 of their Maersk Drilling Shares (payable in DKK), subject to an aggregate cash consideration cap of $50 million. A Maersk Drilling shareholder electing to receive the cash consideration will receive, as applicable, (i) $1,000 for the applicable portion of their Maersk Drilling Shares, or (ii) the amount corresponding to the total holding of their Maersk Drilling Shares if such holding of Maersk Drilling Shares represents a value of less than $1,000 in the aggregate, subject to any reduction under the cap described in the preceding sentence. A Maersk Drilling shareholder holding Maersk Drilling Shares exceeding a value of $1,000 in the aggregate cannot elect to receive less than $1,000 in cash consideration if the cash consideration in lieu of Topco Shares is elected. Each of Maersk Drilling and Topco will take steps to procure that each Maersk Drilling restricted stock unit award (a “Maersk Drilling RSU Award”) that is outstanding immediately prior to the acceptance time of the Offer (the “Acceptance Time”) is exchanged, at the Acceptance Time, with the right to receive, on the same terms and conditions as were applicable under the Maersk Drilling LTI (including any vesting conditions), that number of Topco Shares equal to the product of (1) the number of Maersk Drilling Shares subject to such Maersk Drilling RSU Award immediately prior to the Acceptance Time and (2) the Exchange Ratio, with any fractional Maersk Drilling Shares rounded to the nearest whole share. Upon such exchange, such Maersk Drilling RSU Awards will cease to represent a right to receive Maersk Drilling Shares (or value equivalent to Maersk Drilling Shares).

As further described in the accompanying proxy statement/prospectus, concurrently with the entry into the Business Combination Agreement, APMH Invest A/S (“APMH Invest”), which holds approximately 41.6% of the issued and outstanding Maersk Drilling Shares, entered into an irrevocable undertaking with Noble, Topco and Maersk Drilling, pursuant to which APMH Invest has, among other things, agreed to (a) accept the Offer in respect of the Maersk Drilling Shares that it owns and not withdraw such acceptance; (b) waive the right to receive any cash consideration in the Offer; (c) not vote in favor of any resolution to approve a competing alternative proposal and (d) subject to certain exceptions, be bound by certain transfer restrictions with respect to the Maersk Drilling Shares that it owns.

In addition, as further described in the accompanying proxy statement/prospectus, concurrently with the entry into the Business Combination Agreement, Noble and Maersk Drilling entered into voting agreements (collectively, the “Voting Agreements”) with certain funds and accounts for which Pacific Investment Management Company LLC serves as investment manager, adviser or sub-adviser, as applicable, certain funds and accounts for which Canyon Capital Advisors LLC and/or one of its affiliates serves as investment manager, advisor or co-advisor, as applicable, and certain funds advised by GoldenTree Asset Management LP (each, a

 

2


Table of Contents

Noble Supporting Shareholder”), which collectively held approximately 53% of the issued and outstanding Noble Shares as of the date of the Voting Agreements. Pursuant to the Voting Agreements, each Noble Supporting Shareholder has, among other things, agreed to (a) consent to and vote (or cause to be voted) its Noble Shares (i) in favor of all matters, actions and proposals contemplated by the Business Combination Agreement for which Noble shareholder approval is required and any other matters, actions or proposals required to consummate the Business Combination in accordance with the Business Combination Agreement, and (ii) among other things, against any competing alternative proposal; (b) be bound by certain other covenants and agreements relating to the Business Combination and (c) subject to certain exceptions, be bound by certain transfer restrictions with respect to a portion of their securities.

In addition to the Business Combination Proposals, Noble shareholders are being asked to consider and vote upon a proposal to adjourn the General Meeting to a later date or dates, if necessary, (a) to permit further solicitation and vote of proxies if there are insufficient votes for the approval of the Business Combination Proposals, (b) if there are insufficient Noble Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the General Meeting or (c) to allow reasonable time for the filing or mailing of any supplemental or amended disclosures that Noble has determined, based on the advice of outside legal counsel, is reasonably likely to be required under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by Noble shareholders prior to the General Meeting (the “Adjournment Proposal”). The Adjournment Proposal will be presented to Noble shareholders only in the event that there are insufficient votes for the approval of the Business Combination Proposals, if there are insufficient Noble Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the General Meeting or to allow reasonable time for the filing or mailing of certain supplemental or amended disclosures. Each of the proposals to be presented to the Noble shareholders is more fully described in this proxy statement/prospectus, which each shareholder is encouraged to read carefully.

The Noble Shares are currently listed on the NYSE under the symbol “NE.” Upon the closing of the Business Combination (the “Closing”), the Noble Shares will be delisted from the NYSE. Topco intends to list the Topco Shares on the NYSE under the symbol “NE” upon the Closing. Topco intends to list the Topco Shares on Nasdaq Copenhagen under a ticker symbol to be determined prior to Closing. Noble cannot assure you that the Topco Shares will be approved for listing on the NYSE or Nasdaq Copenhagen.

With respect to Noble and the Noble Shares, the accompanying proxy statement/prospectus serves as a proxy statement for the General Meeting, where Noble shareholders will vote on, among other things, proposals to approve the Business Combination and adopt the Business Combination Agreement, as well as a prospectus for the Topco Shares to be issued to Noble shareholders and warrantholders in the Merger and to Maersk Drilling shareholders in connection with the Offer.

The Closing is conditioned on the satisfaction or waiver of the conditions set forth in the Business Combination Agreement. The conditions to closing in the Business Combination Agreement are for the sole benefit of the parties thereto and may be waived by such parties.

Noble is providing the accompanying proxy statement/prospectus and accompanying proxy card to its shareholders in connection with the solicitation of proxies to be voted at the General Meeting and at any adjournments or postponements of the General Meeting. Information about the General Meeting, the Business Combination, the Merger and other related business to be considered by the Noble shareholders at the General Meeting is included in the accompanying proxy statement/prospectus. Whether or not you plan to attend the General Meeting, all Noble shareholders are urged to read carefully the accompanying proxy statement/prospectus, including the Annexes and the accompanying financial statements of Noble and Maersk Drilling carefully and in their entirety. In particular, you are urged to read carefully the section entitled “Risk Factors” beginning on page 28 of the accompanying proxy statement/prospectus.

 

3


Table of Contents

After careful consideration, the Noble Board has approved the Business Combination Agreement and the Business Combination, and recommends that Noble shareholders vote “FOR” the Business Combination Proposal, “FOR” the NYSE Proposal, “FOR” the Advisory Compensation Proposal and “FOR” all other proposals presented to Noble shareholders in the accompanying proxy statement/prospectus. When you consider the Noble Board’s recommendation of these proposals, you should keep in mind that certain Noble directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. Please see the section entitled “The Business CombinationInterests of Nobles Directors and Executive Officers in the Business Combination” in the accompanying proxy statement/prospectus for additional information.

Approval of the Business Combination Proposal requires the affirmative vote of holders of at least two-thirds of the Noble Shares that are entitled to vote and are voted at the General Meeting. Approval of the NYSE Proposal, the Advisory Compensation Proposal and the Adjournment Proposal each require the affirmative vote of holders of a majority of Noble Shares that are entitled to vote and are voted at the General Meeting.

Your vote is very important. Whether or not you plan to attend the General Meeting, please vote as soon as possible by following the instructions in the accompanying proxy statement/prospectus to ensure that your shares are represented at the General Meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the General Meeting. The transactions contemplated by the Business Combination Agreement, including the Merger, will be consummated only if the Business Combination Proposal is approved at the General Meeting. Each of the NYSE Proposal and the Advisory Compensation Proposal is conditioned on the approval of the Business Combination Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in the accompanying proxy statement/prospectus.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the General Meeting. If you fail to return your proxy card, and do not attend the General Meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the General Meeting. If you are a shareholder of record and you attend the General Meeting and wish to vote in person, you may withdraw your proxy and vote in person.

On behalf of the Noble Board, I would like to thank you for your support of Noble and look forward to a successful completion of the Business Combination.

April 11, 2022

 

Sincerely,
  LOGO
  Robert W. Eifler
  Chief Executive Officer and Director

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

The accompanying proxy statement/prospectus is dated April 11, 2022, and is expected to be first mailed or otherwise delivered to Noble shareholders on or about April 11, 2022.

 

4


Table of Contents

ADDITIONAL INFORMATION

This document incorporates important business and financial information about Noble filed with the SEC that is not included in or delivered with this document. You can obtain any of the documents filed with the SEC by Noble at no cost from the SEC’s website at www.sec.gov. You may also request copies of these documents, including documents incorporated by reference into this document, at no cost, by contacting Noble. Please see “Where You Can Find More Information” for more details. In order to receive timely delivery of the documents in advance of the special meeting of Noble shareholders, you should make your request to Noble at 13135 Dairy Ashford, Suite 800, Sugar Land, Texas 77478, (281) 276-6100, no later than May 3, 2022 or five trading days prior to the General Meeting.

No person is authorized to give any information or to make any representation with respect to the matters that this proxy statement/prospectus or the exchange offer prospectus describes other than those contained in this proxy statement/prospectus and the exchange offer prospectus, and, if given or made, the information or representation must not be relied upon as having been authorized by Topco, Noble or Maersk Drilling. This proxy statement/prospectus and the exchange offer prospectus do not constitute an offer to sell or a solicitation of an offer to buy securities or a solicitation of a proxy in any jurisdiction where, or to any person to whom, it is unlawful to make such an offer or a solicitation. Neither the delivery of this proxy statement/prospectus or the exchange offer prospectus nor any distribution of securities made under this proxy statement/prospectus or the exchange offer prospectus will, under any circumstances, create an implication that there has been no change in the affairs of Topco, Noble or Maersk Drilling since the date of this proxy statement/prospectus or the exchange offer prospectus or that any information contained herein is correct as of any time subsequent to such date.

 

5


Table of Contents

NOTICE OF EXTRAORDINARY GENERAL MEETING

OF NOBLE CORPORATION

TO BE HELD ON MAY 10, 2022

To the Shareholders of Noble Corporation:

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Noble Corporation, an exempted company incorporated in the Cayman Islands with limited liability (“Noble”), will be held on May 10, 2022 at 9:00 a.m., Central Time, at NobleAdvances Training and Collaboration Center, 12550 Reed Rd., Ste. 200, Sugar Land, Texas 77478 (the “General Meeting”). You are cordially invited to attend the General Meeting to conduct the following items of business and/or consider, and if thought fit, approve the following resolutions:

 

1.

Business Combination Proposal—RESOLVED, as a special resolution (the “Business Combination Proposal”), that the business combination between Noble and The Drilling Company of 1972 A/S, a Danish public limited liability company (“Maersk Drilling” or together with its subsidiaries, the “Maersk Drilling Group”), which will be effected through the Business Combination Agreement (including the Plan of Merger exhibited thereto as Exhibit C), dated as of November 10, 2021 (as it may be amended from time to time, the “Business Combination Agreement”), by and among Noble, Maersk Drilling, Noble Finco Limited, a private limited company formed under the laws of England and Wales and an indirect, wholly owned subsidiary of Noble (“Topco”), Noble Newco Sub Limited, a Cayman Islands exempted company and a direct, wholly owned subsidiary of Topco (“Merger Sub”), a copy of which is attached to the accompanying proxy statement/prospectus as Annex A, pursuant to which, among other things, (i) (x) Noble will merge with and into Merger Sub (the “Merger”), with Merger Sub surviving the Merger as a wholly owned subsidiary of Topco and (y) the ordinary shares, par value $0.00001 per share, of Noble (“Noble Shares”) will convert into an equivalent number of A ordinary shares, par value $0.00001 per share, of Topco (the “Topco Shares”), and (ii) (x) Topco will make a voluntary tender exchange offer to Maersk Drilling’s shareholders (the “Offer” and, together with the Merger and the other transactions contemplated by the Business Combination Agreement, the “Business Combination”) and (y) upon the consummation of the Offer, if more than 90% of the issued and outstanding shares, nominal value DKK 10 per share, of Maersk Drilling (“Maersk Drilling Shares”) are acquired by Topco, Topco will redeem any Maersk Drilling Shares not exchanged in the Offer by Topco for, at the election of the holder, either Topco Shares or cash (or, for those holders that do not make an election, only cash), under Danish law by way of a compulsory purchase, be approved.

 

2.

NYSE Proposal—RESOLVED, as an ordinary resolution (the “NYSE Proposal”), a proposal to approve, assuming the Business Combination Proposal is approved and adopted, for the purposes of complying with the applicable listing rules of the NYSE, the issuance of the Topco Shares in connection with the Business Combination.

 

3.

Advisory Compensation Proposal—RESOLVED, as an ordinary resolution (the “Advisory Compensation Proposal” and collectively, with the Business Combination Proposal and the NYSE Proposal, the “Business Combination Proposals”), a proposal to approve, on a non-binding advisory basis, certain compensation that may be paid or become payable to Noble’s named executive officers that is based on or otherwise relates to the Business Combination.

 

4.

Adjournment Proposal—RESOLVED, as an ordinary resolution (the “Adjournment Proposal”), to adjourn the General Meeting to a later date or dates, if necessary, (a) to permit further solicitation and vote of proxies if there are insufficient votes for the approval of Proposal Nos. 1 through 3, (b) if there are insufficient Noble Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the General Meeting or (c) to allow reasonable time for the filing or mailing of any supplemental or amended disclosures that Noble has determined, based on the advice of outside legal counsel, is reasonably likely to be required under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by Noble shareholders prior to the General Meeting.

 

1


Table of Contents

The record date for the General Meeting is April 8, 2022, and only shareholders at the close of business on that date may vote at the General Meeting or any adjournment thereof.

As further described in the accompanying proxy statement/prospectus, subject to the terms and conditions of the Business Combination Agreement, in connection with the Business Combination:

 

   

each Noble Share issued and outstanding immediately prior to the Merger Effective Time will be converted into one newly and validly issued, fully paid and non-assessable Topco Share;

 

   

each penny warrant to purchase Noble Shares issued and outstanding immediately prior to the Merger Effective Time will cease to represent the right to acquire Noble Shares and shall be automatically cancelled, converted into and exchanged for a number of Topco Shares equal to the number of Noble Shares underlying such penny warrant, rounded to the nearest whole share;

 

   

each warrant to purchase Noble Shares (other than penny warrants) issued and outstanding immediately prior to the Merger Effective Time will be converted automatically into a warrant to acquire a number of Topco Shares equal to the number of Noble Shares underlying such warrant, with the same terms as were in effect immediately prior to the Merger Effective Time under the terms of the applicable warrant agreement; and

 

   

each award of restricted share units representing the right to receive Noble Shares, or value based on the value of Noble Shares (each, a “Noble RSU Award”) that is outstanding immediately prior to the Merger Effective Time will cease to represent a right to acquire Noble Shares (or value equivalent to Noble Shares) and will be exchanged for restricted share units representing the right to acquire, on the same terms and conditions as were applicable under the Noble RSU Award (including any vesting conditions), that number of Topco Shares equal to the number of Noble Shares subject to such Noble RSU Award immediately prior to the Merger Effective Time.

As further described in this proxy statement/prospectus, concurrently with the entry into the Business Combination Agreement, APMH Invest A/S (“APMH Invest”), which holds approximately 41.6% of the issued and outstanding Maersk Drilling Shares, entered into an irrevocable undertaking with Noble, Topco and Maersk Drilling, pursuant to which APMH Invest has, among other things, agreed to (a) accept the Offer in respect of the Maersk Drilling Shares that it owns and not withdraw such acceptance; (b) waive the right to receive any cash consideration in the Offer; (c) not vote in favor of any resolution to approve a competing alternative proposal and (d) subject to certain exceptions, be bound by certain transfer restrictions with respect to the Maersk Drilling Shares that it owns.

In addition, as further described in this proxy statement/prospectus, concurrently with the entry into the Business Combination Agreement, Noble and Maersk Drilling entered into voting agreements (collectively, the “Voting Agreements”) with certain funds and accounts for which Pacific Investment Management Company LLC serves as investment manager, adviser or sub-adviser, as applicable, certain funds advised by Canyon Capital Advisors LLC and certain funds advised by GoldenTree Asset Management LP (each, a “Noble Supporting Shareholder”), which collectively held approximately 53% of the issued and outstanding Noble Shares as of the date of the Voting Agreements. Pursuant to the Voting Agreements, each Noble Supporting Shareholder has, among other things, agreed to (a) consent to and vote (or cause to be voted) its Noble Shares (i) in favor of all matters, actions and proposals contemplated by the Business Combination Agreement for which Noble shareholder approval is required and any other matters, actions or proposals required to consummate the Business Combination in accordance with the Business Combination Agreement, and (ii) among other things, against any competing alternative proposal; (b) be bound by certain other covenants and agreements relating to the Business Combination and (c) subject to certain exceptions, be bound by certain transfer restrictions with respect to a portion of their securities.

The above matters are more fully described in this proxy statement/prospectus, which also includes as Annex A, a copy of the Business Combination Agreement. You are urged to read carefully this proxy statement/prospectus in its entirety, including the Annexes and accompanying financial statements of Noble and Maersk Drilling.

 

2


Table of Contents

The closing of the Business Combination is conditioned upon the approval of the Business Combination Proposal and the NYSE Proposal. Each of the NYSE Proposal and the Advisory Compensation Proposal is conditioned upon the approval of the Business Combination Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in the accompanying proxy statement/prospectus.

Approval of the Business Combination Proposal requires the affirmative vote of holders of at least two-thirds of the Noble Shares that are entitled to vote and are voted at the General Meeting. Approval of the NYSE Proposal, the Advisory Compensation Proposal and the Adjournment Proposal requires the affirmative vote of holders of a majority of the Noble Shares that are entitled to vote and are voted at the General Meeting. The Noble Board recommends that you vote FOR each of these proposals.

 

By Order of the Board of Directors
  LOGO
  Robert W. Eifler
  Chief Executive Officer and Director

Sugar Land, TX

April 11, 2022

 

3


Table of Contents

TABLE OF CONTENTS

 

     Page  

LETTER TO SHAREHOLDERS OF NOBLE CORPORATION

  

ABOUT THIS PROXY STATEMENT/PROSPECTUS AND THE EXCHANGE OFFER PROSPECTUS

     iii  

CONVENTIONS WHICH APPLY TO THIS PROXY STATEMENT/PROSPECTUS AND THE EXCHANGE OFFER PROSPECTUS

     iii  

IMPORTANT INFORMATION ABOUT U.S. GAAP, NON-GAAP, IFRS AND NON-IFRS FINANCIAL MEASURES

     iii  

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

     iv  

FREQUENTLY USED TERMS AND BASIS OF PRESENTATION

     v  

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION AND THE GENERAL MEETING

     ix  

SUMMARY

     1  

SUMMARY HISTORICAL FINANCIAL DATA OF NOBLE

     23  

SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF MAERSK DRILLING

     25  

SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     27  

RISK FACTORS

     28  

GENERAL INFORMATION

     65  

EXTRAORDINARY GENERAL MEETING OF NOBLE SHAREHOLDERS

     68  

THE NOBLE BOARD RECOMMENDS THAT YOU VOTE “FOR” EACH OF THESE PROPOSALS.

     69  

THE BUSINESS COMBINATION

     73  

DESCRIPTION OF THE EXCHANGE OFFER

     122  

MATERIAL TAX CONSIDERATIONS

     132  

THE BUSINESS COMBINATION AGREEMENT AND ANCILLARY DOCUMENTS

     139  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     160  

BUSINESS OF TOPCO BEFORE THE BUSINESS COMBINATION

     185  

BUSINESS OF MAERSK DRILLING AND CERTAIN INFORMATION ABOUT MAERSK DRILLING

     187  

MAERSK DRILLING’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     206  

MANAGEMENT OF TOPCO AFTER THE BUSINESS COMBINATION

     230  

DESCRIPTION OF TOPCO SECURITIES

     236  

COMPARISON OF SHAREHOLDER RIGHTS

     249  

BENEFICIAL OWNERSHIP OF TOPCO SHARES

     277  

PRICE RANGE OF SECURITIES AND DIVIDENDS

     280  

PROPOSAL NO. 1—THE BUSINESS COMBINATION PROPOSAL

     282  

PROPOSAL NO. 2—THE NYSE PROPOSAL

     283  

PROPOSAL NO. 3—THE ADVISORY COMPENSATION PROPOSAL

     284  

PROPOSAL NO. 4—THE ADJOURNMENT PROPOSAL

     285  

LEGAL MATTERS

     286  

EXPERTS

     286  

ENFORCEMENT OF CIVIL LIABILITIES

     286  

HOUSEHOLDING INFORMATION

     287  

TRANSFER AGENT AND REGISTRAR

     287  

FUTURE SHAREHOLDER PROPOSALS

     287  

WHERE YOU CAN FIND MORE INFORMATION

     287  

PART II

     II-1  

 

i


Table of Contents


Table of Contents

ABOUT THIS PROXY STATEMENT/PROSPECTUS AND THE EXCHANGE OFFER PROSPECTUS

This document, which forms part of a registration statement on Form S-4 filed with the U.S. Securities and Exchange Commission (the “SEC”), by Topco (File No. 333-261780), constitutes a prospectus of Topco under Section 5 of the U.S. Securities Act of 1933, as amended (the “Securities Act”), with respect to the Topco Shares to be issued to Noble shareholders and warrant holders in the Merger and Maersk Drilling shareholders in the Offer, if the Business Combination is consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect to the General Meeting at which Noble shareholders will be asked to consider and vote upon the Business Combination Proposals to, among other matters approve the Business Combination and adopt the Business Combination Agreement.

CONVENTIONS WHICH APPLY TO THIS PROXY STATEMENT/PROSPECTUS AND THE EXCHANGE OFFER PROSPECTUS

In this proxy statement/prospectus and the exchange offer prospectus, unless otherwise specified or the context otherwise requires:

 

   

“$,” “USD” and “U.S. dollar” each refer to the United States dollar;

 

   

“DKK” and “kr” each refer to the Danish krone; and

 

   

“€,” “EUR” and “Euro” each refer to the Euro.

IMPORTANT INFORMATION ABOUT U.S. GAAP, NON-GAAP, IFRS AND

NON-IFRS FINANCIAL MEASURES

Noble’s financial statements included in this proxy statement/prospectus and the exchange offer prospectus have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for financial information and pursuant to the rules and regulations of the SEC.

Maersk Drilling’s financial statements included in this proxy statement/prospectus and the exchange offer prospectus have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”).

This proxy statement/prospectus and the exchange offer prospectus includes certain references to financial measures that were not prepared in accordance with U.S. GAAP or IFRS. Noble and Maersk Drilling believe that the presentation of non-GAAP or non-IFRS results, as applicable, is useful to investors for analyzing their respective business and business trends and comparing performance to prior periods, along with enhancing investors’ ability to view Noble’s or Maersk Drilling’s results, as applicable, from management’s perspective. The presentation of this additional information should not be considered a substitute for results prepared in accordance with U.S. GAAP or IFRS. The presentation of this non-GAAP or non-IFRS information is not meant to be considered in isolation or as a substitute for Noble’s or Maersk Drilling’s consolidated financial results prepared in accordance with U.S. GAAP or IFRS, respectively.

 

iii


Table of Contents

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

Solely for convenience, some of the trademarks, service marks, logos and trade names referred to in this proxy statement/prospectus and the exchange offer prospectus are presented without the ® and symbols, but such references are not intended to indicate, in any way, that Noble or Maersk Drilling, as applicable, will not assert, to the fullest extent under applicable law, Noble’s or Maersk Drilling’s rights or the rights of the applicable licensors to these trademarks, service marks and trade names. This proxy statement/prospectus and the exchange offer prospectus contain additional trademarks, service marks and trade names of others. Topco, Noble and Maersk Drilling do not intend that their use or display of other companies’ trademarks, service marks, copyrights or trade names to imply a relationship with, or endorsement or sponsorship of Noble or Maersk Drilling, by any other companies.

 

iv


Table of Contents

FREQUENTLY USED TERMS AND BASIS OF PRESENTATION

Unless otherwise stated in this proxy statement/prospectus or the exchange offer prospectus the context otherwise requires, references to:

“Acceptance Time” means the acceptance time of the Offer.

“Adjournment Proposal” means the proposal to approve to adjourn the General Meeting to a later date or dates, if necessary, (a) to permit further solicitation and vote of proxies if there are insufficient votes for the approval of Proposal Nos. 1 through 3, (b) if there are insufficient Noble Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the General Meeting or (c) to allow reasonable time for the filing or mailing of any supplemental or amended disclosures that Noble has determined, based on the advice of outside legal counsel, is reasonably likely to be required under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by Noble shareholders prior to the General Meeting.

“Advisory Compensation Proposal” means the proposal to approve, on a non-binding advisory basis, certain compensation that may be paid or become payable to Noble’s named executive officers that is based on or otherwise relates to the Business Combination.

“APMH” means A.P. Møller Holding A/S.

“APMH Invest” means APMH Invest A/S.

“Business Combination” means the transactions contemplated by the Business Combination Agreement, including the Merger and the Offer.

“Business Combination Agreement” means the Business Combination Agreement, dated November 10, 2021, by and among Topco, Merger Sub, Noble and Maersk Drilling, as it may be amended from time to time.

“Business Combination Proposal” means the proposal to approve the adoption of the Business Combination Agreement and the Business Combination.

“Cayman Companies Act” means the Companies Act (As Revised) of the Cayman Islands.

“Closing” means the closing of the transactions contemplated by the Business Combination Agreement.

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

“Companies Act” means the Companies Act 2006 of the United Kingdom, as amended from time to time.

“Court” means the High Court of Justice in England and Wales.

“COVID-19” means the novel coronavirus known as SARS-CoV-2 or COVID-19, and any evolutions, mutations thereof or related or associated epidemics, pandemics or disease outbreaks.

“DFSA” means the Danish Financial Supervisory Authority.

“EU Prospectus Regulation” means Regulation (EU) 2017/1129 of the European Parliament and of the Council of June 14, 2017, as amended, and the rules and regulations promulgated thereunder.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

 

v


Table of Contents

“General Meeting” means the extraordinary general meeting of Noble which will be held on May 10, 2022 at 9:00 a.m., Central Time, at NobleAdvances Training and Collaboration Center, 12550 Reed Rd., Ste. 200, Sugar Land, Texas 77478.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“IAS” means the International Accounting Standard.

“IASB” means the International Accounting Standards Board.

“IFRS” means the International Financial Reporting Standards as issued by the IASB.

“Investor Manager” means certain funds and accounts for which Pacific Investment Management Company LLC serves as investment manager, adviser or sub-adviser, as applicable.

“JOBS Act” means the Jumpstart Our Business Startups Act of 2012.

“Maersk Drilling” means The Drilling Company of 1972 A/S, a Danish public limited liability company.

“Maersk Drilling Facilities Agreements” means the Syndicated Facilities Agreement and the DSF Facility Agreement.

“Maersk Drilling Share” means a share of nominal value DKK 10 held in the capital of Maersk Drilling.

“Merger” means the merger of Noble with and into Merger Sub, with Merger Sub surviving such merger as a wholly owned subsidiary of Topco.

“Merger Effective Time” means the time the Merger becomes effective.

“Merger Sub” means Noble Newco Sub Limited, a Cayman Islands exempted company and a direct, wholly owned subsidiary of Topco.

“Minimum Acceptance Condition” means the acquisition by Topco of at least 80% of the then outstanding Maersk Drilling Shares and voting rights of Maersk Drilling (which percentage may be lowered by Topco in its sole discretion to not less than 70%).

“Nasdaq Copenhagen” means Nasdaq Copenhagen A/S.

“NCA” means the Norwegian Competition Authority (Konkurransetilsynet).

“Noble” means Noble Corporation, an exempted company incorporated in the Cayman Islands with limited liability.

“Noble Articles” means Noble’s amended and restated memorandum and articles of association.

“Noble Board” means the board of directors of Noble.

“Noble Merger Surviving Entity” means Merger Sub as the surviving entity and a direct wholly owned subsidiary of Topco following the Merger.

“Noble RSU Award” means each award of restricted share units representing the right to receive Noble Shares, or value based on the value of Noble Shares.

“Noble Shares” means the ordinary shares, par value $0.00001 per share, of Noble.

 

vi


Table of Contents

“Noble Supporting Shareholders” means the Investor Manager, certain funds and accounts for which Canyon Capital Advisors LLC and/or one of its affiliates serves as investment manager, advisor or co-advisor, as applicable, and certain funds advised by GoldenTree Asset Management LP, each of which have entered into Voting Agreements.

“Noble Warrants” means the warrants to purchase Noble Shares issued pursuant to the Noble Warrant Agreements.

“Noble Warrant Agreements” means, collectively, (i) the Tranche 1 Warrant Agreement, dated as of February 5, 2021, by and among Noble, Computershare Inc. and Computershare Trust Company, N.A.; (ii) the Tranche 2 Warrant Agreement, dated as of February 5, 2021, by and among Noble, Computershare Inc. and Computershare Trust Company, N.A.; and (iii) the Tranche 3 Warrant Agreement, dated as of February 5, 2021, by and among Noble, Computershare Inc. and Computershare Trust Company, N.A.

“NYSE” means the New York Stock Exchange.

“NYSE Proposal” means the proposal to approve, assuming the Business Combination Proposal is approved and adopted, for the purposes of complying with the applicable listing rules of the NYSE, the issuance of the Topco Shares in connection with the Business Combination.

“Offer” means the voluntary recommended tender exchange offer by Topco to Maersk Drilling’s shareholders.

“Offer Document” means an offer document with respect to the Offer approved by the DFSA in accordance with the Takeover Order.

“Offer Period” means a period commencing as soon practically possible after the Offering Circular and the Offer Document have been approved by the DFSA with an expected duration of at least four weeks.

“Offering Circular” means one or more prospectuses (or similar exemption document prepared in reliance on an applicable exemption under the EU Prospectus Regulation and in accordance with the requirements of Commission Delegated Regulation (EU) 2021/528 of 16 December 2020) to be prepared by Topco and/or Noble pursuant to the EU Prospectus Regulation.

“Penny Warrant Agreement” means the Penny Warrant Agreement, dated as of February 5, 2021, by and between Noble, Computershare Inc. and Computershare Trust Company, N.A.

“Penny Warrants” means the warrants to purchase Noble Shares issued pursuant to the Penny Warrant Agreement.

“Relationship Agreement” means that certain agreement to be entered into at the Closing by and among Topco, Noble, the Investor Manager and APMH Invest, which will set forth certain director designation rights following the Closing. A form of the Relationship Agreement is attached to this proxy statement/prospectus and the exchange offer prospectus as Annex E.

“RRA” means that certain registration rights agreement to be entered into at the Closing by and between Topco and APMH Invest, pursuant to which, among other things, and subject to certain limitations set forth therein, APMH Invest will have customary demand and piggyback registration rights. A form of the RRA is attached to this proxy statement/prospectus and the exchange offer prospectus as Annex F.

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002.

“SEC” means the U.S. Securities and Exchange Commission.

 

vii


Table of Contents

“Takeover Order” means the DFSA’s Executive Order on Takeover Bids, Executive Order no. 636/2020 of 15 May 2020 (“Bekendtgørelse om Overtagelsestilbud”).

“Topco” means Noble Finco Limited, a private limited company formed under the laws of England and Wales and an indirect, wholly owned subsidiary of Noble.

“Topco Articles of Association” means the articles of association for Topco that will be adopted and take effect at the Acceptance Time. A form of the Topco Articles of Association is attached to this proxy statement/prospectus and the exchange offer prospectus as Annex B.

“Topco Board” means the board of directors of Topco.

“Topco Shares” means the A ordinary shares, par value $0.00001 per share, of Topco.

“Topco Warrant” means the warrants to purchase Topco Shares, which will be issued to holders of the Noble Warrants in connection with the Merger and which will have the same terms as were in effect immediately prior to the Merger Effective Time under the terms of the applicable Noble Warrant Agreement.

“UK CMA” means the UK Competition and Markets Authority.

“Undertaking” means the irrevocable undertaking entered into concurrently with the execution of the Business Combination Agreement, by and among APMH Invest, Noble, Topco and Maersk Drilling.

“Voting Agreements” means the voting agreements entered into concurrently with the execution of the Business Combination Agreement, by and among Noble, Maersk Drilling and the Noble Supporting Shareholders.

 

viii


Table of Contents

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION AND THE GENERAL MEETING

The questions and answers below highlight only selected information from this proxy statement/prospectus and only briefly address some commonly asked questions about the General Meeting and the proposals to be presented at the General Meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that is important to Noble shareholders. Shareholders are urged to read carefully this entire proxy statement/prospectus, including the Annexes and the other documents referred to herein, to fully understand the proposed Business Combination and the voting procedures for the General Meeting, which will be held on May 10, 2022 at 9:00 a.m., Central Time, at NobleAdvances Training and Collaboration Center, 12550 Reed Rd., Ste. 200, Sugar Land, Texas 77478, or at such other time, on such other date and at such other place to which the meeting may be adjourned.

 

Q:

Why am I receiving this proxy statement/prospectus?

 

A:

On November 10, 2021, Noble and Maersk Drilling entered into the Business Combination Agreement to effect a business combination between the two companies. Pursuant to the Business Combination Agreement, among other things, (i) (x) Noble will merge with and into Merger Sub, with Merger Sub surviving the Merger as a wholly owned subsidiary of Topco and (y) the Noble Shares will convert into an equivalent number of Topco Shares, and (ii) (x) Topco will make a voluntary tender exchange offer to Maersk Drilling’s shareholders as described below (the “Offer” and, together with the Merger and the other transactions contemplated by the Business Combination Agreement, the “Business Combination”) and (y) upon the consummation of the Offer, if more than 90% of the issued and outstanding Maersk Drilling Shares are acquired by Topco, Topco will redeem any Maersk Drilling Shares not exchanged in the Offer by Topco for, at the election of the holder, either Topco Shares or cash (or, for those holders that do not make an election, only cash), under Danish law by way of a compulsory purchase (the “Compulsory Purchase”).

In conjunction with the Business Combination, Noble shareholders are being asked to consider and vote upon, among other matters, a proposal to approve the Business Combination and to adopt the Business Combination Agreement. A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A. Additionally, assuming the Business Combination Proposal is approved, you are being asked to vote on the NYSE Proposal and the Advisory Compensation Proposal.

This proxy statement/prospectus and its Annexes contain important information about the proposed Business Combination and the other matters to be acted upon at the General Meeting. You should read this proxy statement/prospectus and its Annexes carefully and in their entirety.

Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement/prospectus and its Annexes.

 

Q:

When and where is the General Meeting?

 

A:

The General Meeting will be held on May 10, 2022 at 9:00 a.m., Central Time, at NobleAdvances Training and Collaboration Center, 12550 Reed Rd., Ste. 200, Sugar Land, Texas 77478.

 

Q:

What are the specific proposals on which I am being asked to vote at the General Meeting?

 

A:

The Noble shareholders are being asked to approve the following proposals:

 

  1.

Business Combination Proposal—To adopt and approve, as a special resolution, the Business Combination Agreement and the transactions contemplated thereby, including the Business Combination (Proposal No. 1);

 

ix


Table of Contents
  2.

NYSE Proposal—To adopt and approve, as an ordinary resolution, assuming the Business Combination Proposal is approved and adopted, for the purposes of complying with the applicable listing rules of the NYSE, the issuance of the Topco Shares in connection with the Business Combination (Proposal No. 2);

 

  3.

Advisory Compensation Proposal—To adopt and approve, as an ordinary resolution, on a non-binding advisory basis, certain compensation that may be paid or become payable to Noble’s named executive officers that is based on or otherwise relates to the Business Combination (Proposal No. 3); and

 

  4.

Adjournment Proposal—To consider and vote upon a proposal to approve, as an ordinary resolution, to adjourn the General Meeting to a later date or dates, if necessary, (a) to permit further solicitation and vote of proxies if there are insufficient votes for the approval of Proposal Nos. 1 through 3, (b) if there are insufficient Noble Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the General Meeting or (c) to allow reasonable time for the filing or mailing of any supplemental or amended disclosures that Noble has determined, based on the advice of outside legal counsel, is reasonably likely to be required under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by Noble shareholders prior to the General Meeting. The Adjournment Proposal (Proposal No. 4) will be presented to Noble shareholders only in the event that there are insufficient votes for the approval of the Business Combination Proposals, if there are insufficient Noble Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the General Meeting or to allow reasonable time for the filing or mailing of certain supplemental or amended disclosures.

After careful consideration, Noble has determined that the Business Combination Proposals and the Adjournment Proposal are in the best interests of Noble and its shareholders and unanimously recommends that you vote or give instruction to vote “FOR” each of those proposals.

The existence of financial and personal interests of one or more of Noble’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of Noble and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, Noble’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal — Interests of Noble’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

 

Q:

Are the proposals conditioned on one another?

 

A:

The Closing is conditioned upon the approval of the Business Combination Proposal and the NYSE Proposal. Each of the NYSE Proposal and the Advisory Compensation Proposal is conditioned upon the approval of the Business Combination Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus.

It is important for you to note that in the event the Business Combination Proposal and the NYSE Proposal do not receive the requisite vote for approval, then Noble will not consummate the Business Combination.

 

Q:

What factors did the Noble Board consider in connection with its decision to recommend voting in favor of the Business Combination?

 

A:

The Noble Board considered a number of factors pertaining to the Business Combination as generally supporting its decision to enter into the Business Combination Agreement and the transactions contemplated thereby, including, but not limited to, the following:

Strategic factors considered by the Noble Board:

 

   

World-class offshore driller. The transaction creates the youngest and highest specification fleet of scale featuring seventh generation ultra-deepwater drillships and harsh environment jackups with a

 

x


Table of Contents
 

combined track record of industry-leading utilization. The scale and modernity of the fleet is expected to enable the combined company to operate more efficiently. The combined company will also be attractively diversified across asset classes, geographic regions and customers.

 

   

Accretive to all shareholders. The transaction is expected to result in $125 million of run-rate annual cost synergies within two years post-closing, with value beginning to be realized in the near term post-closing. The transaction is thus expected to be highly accretive to free cash flow per share for both Noble and Maersk Drilling shareholders in the first full year post-closing. The streamlined cost structure is also expected to further the combined company’s cost-competitiveness.

 

   

Enhanced customer experience and sustainability. Like Noble, Maersk Drilling has demonstrated a strong commitment to best-in-class safety performance and customer satisfaction. The modern fleet is expected to provide a robust platform for technical innovation in addition to enabling the combined company to be a first mover in sustainability initiatives.

 

   

Platform for strong cash flow generation and distribution. The combined company has a normalized free cash flow potential of $375 million in 2023 and onward. Additionally, the combined company is expected to have a best-in-class balance sheet with low leverage and significant liquidity, including approximately $900 million of cash, which will facilitate the return of capital to shareholders. Given the efficiency of its fleet and synergies, the combined company is also expected to have the potential to grow its cash flows faster as the global offshore market recovery continues.

 

   

Balanced corporate governance and leadership. The board of directors of the combined company (the “Topco Board”) will initially be comprised of seven individuals: three individuals designated by Maersk Drilling (Claus V. Hemmingsen, the current Chairman of the board of directors of Maersk Drilling (the “Maersk Drilling Board”), Kristin H. Holth and Alastair Maxwell), three individuals designated by Noble (Charles M. (Chuck) Sledge, the current Chairman of the Noble Board, who will become Chairman of the combined company, Alan J. Hirshberg and Ann D. Pickard) and Robert W. Eifler, the Chief Executive Officer of Noble, who will serve as the Chief Executive Officer of the combined company.

Other potentially favorable factors considered by the Noble Board:

 

   

Improved business climate. The current and prospective business climate in the offshore drilling industry, including the regulatory environment, has improved dramatically since the initial outbreak of COVID-19 and the combined company will be well-positioned among likely competitors.

 

   

Due diligence. The favorable results of the due diligence review of Maersk Drilling and its business conducted by Noble and its financial advisors and outside legal counsel.

 

   

Business Combination Agreement. The view that the terms and conditions of the Business Combination Agreement, including the covenants, closing conditions and termination provisions, are favorable to completing the transaction.

 

   

Fairness opinion. Ducera’s oral opinion delivered on November 9, 2021, subsequently confirmed in writing, to the effect that, as of such date and subject to the assumptions, limitations, qualifications and other matters considered in the preparation thereof, the Merger Consideration was fair, from a financial point of view, to the holders of Noble Shares (other than Noble Shares held by Maersk Drilling or its affiliates).

 

   

Alternatives available. Potential strategic alternatives that might be available to Noble relative to the transaction, including remaining a standalone entity or other acquisition opportunities and the belief of the Noble Board that the transaction is in the best interests of Noble and its shareholders given the potential risks, rewards and uncertainties associated with each alternative, including execution and regulatory risks and achievement of anticipated synergies.

 

xi


Table of Contents

Risks and potentially negative factors considered by the Noble Board:

 

   

Integration risk. There are significant risks inherent in combining and integrating two companies, including that the companies may not be successfully integrated or that the expected synergies from combining the two companies may not be realized, and that successful integration of the companies will require the dedication of significant management resources, which will temporarily detract attention from the day-to-day businesses of the combined company.

 

   

Failure to realize anticipated benefits. There are uncertainties in timing and execution with respect to the anticipated benefits of the transaction.

 

   

Implied premium. The equity being provided to Maersk Drilling’s shareholders based on the exchange ratio implies a premium of 28% to the trading price of Maersk Drilling shares as of the last trading date prior to the announcement of the transaction.

 

   

Fixed exchange ratio. The tender offer consideration to be received by holders of Maersk Drilling shares consists of shares based on a fixed exchange ratio and consequently the value of the consideration to be received by Maersk Drilling shareholders may increase.

 

   

Termination fees. The Business Combination Agreement provides that, in certain circumstances relating to the failure to receive necessary regulatory approvals from antitrust authorities, Noble could be required to pay a termination fee of $50 million to Maersk Drilling and, in certain other circumstances, a termination fee equal to $15 million.

 

   

Regulatory risk. The risk that regulatory approvals necessary to consummate the transaction may be delayed or not granted, which may delay or jeopardize the transaction, or that a regulatory or other body imposes restrictions or requires divestitures in connection with the transaction, compliance with which would be necessary but could adversely impact the business of the combined company.

 

   

Tender offer acceptance. Maersk Drilling’s obligation to close the transaction is conditioned on 80% of the then outstanding Maersk Drilling shares and voting rights of Maersk Drilling (which percentage may be lowered by Topco in its sole discretion to not less than 70%) being validly tendered.

 

   

Restrictions on Noble’s activities. The restrictions on Noble prior to the consummation of the transaction with respect to taking actions outside the ordinary course of business, which may delay or prevent Noble from undertaking opportunities that may arise or other actions it would otherwise take pending consummation of the transaction.

 

   

Transaction costs. The substantial costs to be incurred in connection with the transaction, including the costs of integrating the businesses of Noble and Maersk Drilling and the transaction costs to be incurred in connection with the transaction.

 

   

Termination fee. The $15 million termination fee that Maersk Drilling would be required to pay under the Business Combination Agreement upon termination of the Business Combination Agreement under certain circumstances would be insufficient to compensate Noble for its costs incurred in connection with the Business Combination Agreement.

 

   

Inability to retain employees. The possibility of losing key employees and skilled workers as a result of the transaction and the expected consolidation of Noble and Maersk Drilling personnel.

 

   

Loss of customers. The possibility of customer overlap or that key customers may choose not to do business with the combined company.

 

   

Pace of decarbonization. The pace and extent of the energy transition could pose a risk to the combined company and result in lower demand for its services. The combined company’s engagement in the energy transition may be unsuccessful or slower than investors, customers and other stakeholders prefer, which could adversely impact the combined company’s share price, reputation and demand for its products. In its efforts to facilitate decarbonization, the combined company risks investing in

 

xii


Table of Contents
 

technologies, markets or low-carbon products that are unsuccessful or less profitable because there is limited demand for them or they result in higher costs.

The Noble Board also expects that a growing share of the combined company’s greenhouse gas emissions will be subject to regulation, resulting in increased compliance costs and operational restrictions. Regulators may seek to limit certain fossil fuel projects or make it more difficult to obtain required permits, which could have an impact on the realization of projected operating results and synergies. Additionally, investors may limit funds available for investment in companies engaged in the oil and gas industry.

 

   

Other risks. Other risks of the type and nature described under “Risk Factors.”

The foregoing discussion of information and factors considered by the Noble Board is not exhaustive, but the Noble Board believes it includes the material factors considered by the Noble Board. In view of the wide variety of factors considered in connection with their evaluation of the transaction and the complexity of these matters, the Noble Board did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative or specific weight or values to any of these factors. Rather, the Noble Board viewed their position and recommendation as being based on an overall analysis and on the totality of the information presented to and factors considered by them. In addition, in considering the factors described above, individual directors may have given different weights to different factors.

The factors contained in this explanation of the Noble Board’s reasons for the transaction and other information presented in this section of the proxy statement/prospectus contain information that is forward-looking in nature and, therefore, should be read in light of the factors discussed in “General Information—Cautionary Note Regarding Forward-Looking Statements”.

The Noble financial forecasts and Noble’s management’s forecasts for Maersk Drilling were prepared by Noble in connection with the proposed transaction prior to execution of the Business Combination Agreement. These financial forecasts were prepared by, and are the responsibility of, Noble’s management. Neither PricewaterhouseCoopers LLP, Noble’s independent registered public accounting firm, nor any other independent accountant, have audited, reviewed, examined, compiled nor applied agreed-upon procedures with respect to the Noble financial forecasts or Noble’s management’s forecasts for Maersk Drilling and, accordingly, neither PricewaterhouseCoopers LLP nor any other independent accountants express an opinion or any other form of assurance with respect thereto. The report of PricewaterhouseCoopers LLP incorporated by reference in this proxy statement/prospectus and the exchange offer prospectus relates to Noble’s previously issued financial statements. The foregoing report does not extend to the Noble financial forecasts or Noble’s management’s forecasts for Maersk Drilling and should not be read to do so.

 

Q:

Why is Noble providing shareholders with the opportunity to vote on the Business Combination?

 

A:

The approval of the Business Combination (including the Merger) is required under the Noble Articles and the Cayman Companies Act and the approval of the NYSE Proposal is required under the rules of the NYSE. In addition, such approvals are also conditions to the closing of the Business Combination under the Business Combination Agreement.

 

Q:

What will happen in the Business Combination?

 

A:

Pursuant to the Business Combination Agreement, and upon the terms and subject to the conditions set forth therein, Noble and Merger Sub will effect the Merger in order to redomicile Noble in the United Kingdom and Topco will make the Offer to acquire all of the issued and outstanding Maersk Drilling Shares. As a result of the Business Combination, Topco will be the ultimate parent company and own the businesses of Noble, Maersk Drilling and their respective subsidiaries. Please see the section entitled “The Business Combination” for additional information.

 

xiii


Table of Contents

Noble anticipates that, following Closing, the Noble Shares will be delisted from the NYSE and such securities will be deregistered under the Exchange Act. Topco intends to list the Topco Shares on the NYSE under the symbol “NE” upon the Closing. Topco intends to list the Topco Shares on Nasdaq Copenhagen under a ticker symbol to be determined prior to Closing. The Closing is conditioned upon the approval of the Topco Shares being approved for listing on the NYSE and for admission to trading and official listing on Nasdaq Copenhagen. Topco cannot assure you that the Topco Shares will be approved for listing on NYSE or Nasdaq Copenhagen.

 

Q:

What will holders of Noble securities receive in the Business Combination?

 

A:

Subject to the terms and conditions of the Business Combination Agreement, upon consummation of the Merger:

 

   

each Noble Share issued and outstanding immediately prior to the Merger Effective Time will be converted into one newly and validly issued, fully paid and non-assessable Topco Share (the “Merger Consideration”);

 

   

each Penny Warrant issued and outstanding immediately prior to the Merger Effective Time will cease to represent the right to acquire Noble Shares and will be automatically cancelled, converted into and exchanged for a number of Topco Shares equal to the number of Noble Shares underlying such Penny Warrant, rounded to the nearest whole share;

 

   

each Noble Warrant issued and outstanding immediately prior to the Merger Effective Time will be converted automatically into a Topco Warrant to acquire a number of Topco Shares equal to the number of Noble Shares underlying such Noble Warrant, with the same terms as were in effect immediately prior to the Merger Effective Time under the terms of the applicable Noble Warrant Agreement; and

 

   

each Noble RSU Award that is outstanding immediately prior to the Merger Effective Time will cease to represent a right to acquire Noble Shares (or value equivalent to Noble Shares) and will be exchanged for restricted share units representing the right to acquire, on the same terms and conditions as were applicable under the Noble RSU Award (including any vesting conditions), that number of Topco Shares equal to the number of Noble Shares subject to such Noble RSU Award immediately prior to the Merger Effective Time.

 

Q:

What will Maersk Drilling shareholders receive in the Business Combination?

 

A:

Subject to the terms and conditions set forth in the Business Combination Agreement, following the approval of certain regulatory filings with the DFSA, Topco has agreed to commence the Offer to acquire up to 100% of the then outstanding Maersk Drilling Shares and voting rights of Maersk Drilling, not including any treasury shares held by Maersk Drilling. The Offer is conditioned upon, among other things, holders of at least 80% of the then outstanding Maersk Drilling Shares and voting rights of Maersk Drilling tendering their shares in the Offer (which percentage may be lowered by Topco in its sole discretion to not less than 70%) (the “Minimum Acceptance Condition”). In the Offer, eligible Maersk Drilling shareholders may exchange each Maersk Drilling share for 1.6137 newly and validly issued, fully paid and non-assessable Topco Shares (the “Exchange Ratio”), and will have the ability to elect cash consideration for up to $1,000 of their Maersk Drilling Shares (payable in DKK), subject to an aggregate cash consideration cap of $50 million. A Maersk Drilling shareholder electing to receive the cash consideration will receive, as applicable, (i) $1,000 for the applicable portion of their Maersk Drilling Shares, or (ii) the amount corresponding to the total holding of their Maersk Drilling Shares if such holding of Maersk Drilling Shares represents a value of less than $1,000 in the aggregate, subject to any reduction under the cap described in the preceding sentence. A Maersk Drilling shareholder holding Maersk Drilling Shares exceeding a value of $1,000 in the aggregate cannot elect to receive less than $1,000 in cash consideration if the cash consideration in lieu of Topco Shares is elected. Each of Maersk Drilling and Topco will take steps

 

xiv


Table of Contents
  to procure that each Maersk Drilling RSU Award that is outstanding immediately prior to the acceptance time of the Offer (the “Acceptance Time”) is converted, at the Acceptance Time, into the right to receive, on the same terms and conditions as were applicable under the Maersk Drilling LTI (including any vesting conditions), that number of Topco Shares equal to the product of (1) the number of Maersk Drilling Shares subject to such Maersk Drilling RSU Award immediately prior to the Acceptance Time and (2) the Exchange Ratio, with any fractional Maersk Drilling Shares rounded to the nearest whole share. Upon conversion such Maersk Drilling RSU Awards will cease to represent a right to receive Maersk Drilling Shares (or value equivalent to Maersk Drilling Shares).

 

Q:

What equity stake will the current shareholders of Noble and Maersk Drilling hold in Topco after the Closing?

 

A:

Following the Closing, assuming all of the Maersk Drilling Shares are acquired by Topco through the Offer and no cash is paid by Topco in the Offer, Topco will own all of Noble’s and Maersk Drilling’s respective businesses and the former shareholders of Noble and former shareholders of Maersk Drilling will each own approximately 50% of the outstanding Topco Shares (or 50.8% and 49.2%, respectively, assuming Topco pays the full cash consideration cap of $50 million in the Offer and using the volume-weighted average closing price of the Noble Shares as of December 6, 2021), excluding dilution from outstanding Noble warrants and stock-based compensation from Noble and Maersk Drilling.

For more information, please see the sections entitled “The Business CombinationOwnership of Topco” and “Unaudited Pro Forma Condensed Combined Financial Information.

 

Q:

If the Business Combination is completed, will the Topco Shares be listed for trading?

 

A:

Prior to the time of delivery of the Topco Shares to the existing shareholders of Noble and Maersk Drilling pursuant to the Business Combination, Topco will apply to admit its shares to listing and trading on the NYSE, subject to official notice of issuance, and will apply for admission to trading and official listing on Nasdaq Copenhagen. The listings are intended to preserve current Noble shareholders’ and Maersk Drilling shareholders’ access to their historic trading markets in the United States and in Denmark and may further improve liquidity in Topco Shares and Topco’s access to additional equity financing sources. Nevertheless, as with listings on more than one stock exchange of certain other issuers, the liquidity in the market for Topco Shares may be adversely affected if trading is split between two markets at least in the short term and could result in price differentials of Topco Shares between the two exchanges.

 

Q:

How has the announcement of the Business Combination affected the trading price of the Noble Shares?

 

A:

On November 9, 2021, the last trading date before the public announcement of the Business Combination, the Noble Shares closed on the NYSE at $28.57. On April 8, 2022, the trading date immediately prior to the date of this proxy statement/prospectus, the Noble Shares closed on the NYSE at $34.47.

 

Q:

How will Topco be managed following the Business Combination?

 

A:

The Topco Board will initially be comprised of seven individuals: three individuals designated by Maersk Drilling (Claus V. Hemmingsen, the current Chairman of the Maersk Drilling Board, Kristin H. Holth and Alastair Maxwell), three individuals designated by Noble (Charles M. (Chuck) Sledge, the current Chairman of the Noble Board, who will become Chairman of the combined company, Alan J. Hirshberg and Ann D. Pickard) and Robert W. Eifler, the Chief Executive Officer of Noble, who will serve as the Chief Executive Officer of the combined company.

In addition, at the Closing, Topco will enter into the Relationship Agreement with the Investor Manager and APMH Invest, which will set forth certain director designation rights of such Topco shareholders following the Closing. In particular, pursuant to the Relationship Agreement, each of the Investor Manager and APMH

 

xv


Table of Contents

Invest will be entitled to designate (a) two nominees to the Topco Board so long as the Investor Manager or APMH Invest, as applicable, owns no fewer than 20% of the then outstanding Topco Shares and (b) one nominee to the Topco Board so long as the Investor Manager or APMH Invest, as applicable, owns fewer than 20% but no fewer than 15% of the then outstanding Topco Shares. Each nominee of the Investor Manager and APMH Invest will meet the independence standards of the NYSE with respect to Topco; provided, however, that APMH Invest shall be permitted to have one nominee who does not meet such independence standards so long as such nominee is not an employee of Topco or any of its subsidiaries.

 

Q:

Why is Noble proposing the Adjournment Proposal?

 

A:

Noble is proposing the Adjournment Proposal to allow the Noble Board to adjourn the General Meeting to a later date or dates, (A) in order to solicit additional proxies from Noble shareholders in favor of the Business Combination Proposals, (B) if as of the time for which the General Meeting is scheduled, there are insufficient Noble Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the General Meeting, or (C) to allow reasonable time for the filing or mailing of any supplemental or amended disclosures that Noble has determined, based on the advice of outside legal counsel, is reasonably likely to be required under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by Noble shareholders prior to the General Meeting. The Adjournment Proposal will be presented to Noble shareholders only in the event that there are insufficient votes for the approval of the Business Combination Proposals, if there are insufficient Noble Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the General Meeting or to allow reasonable time for the filing or mailing of certain supplemental or amended disclosures. Please see the section entitled “Proposal No. 4—The Adjournment Proposal” for additional information.

 

Q:

What happens if I sell my Noble Shares before the General Meeting?

 

A:

The record date for the General Meeting is earlier than the date that the Business Combination is expected to be completed. If you transfer your Noble Shares after the record date but before the General Meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the General Meeting. If you transfer your Noble Shares prior to the record date, you will have no right to vote those shares at the General Meeting.

 

Q:

What vote is required to approve the proposals presented at the General Meeting?

 

A:

The approval of each of the NYSE Proposal, the Advisory Compensation Proposal and the Adjournment Proposal requires the affirmative vote of holders of at least a majority of Noble Shares that are entitled to vote and are voted at the General Meeting. The approval of the Business Combination Proposal requires the affirmative vote of holders of at least two-thirds of the Noble Shares that are entitled to vote and are voted at the General Meeting. Broker non-votes will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the outcome of any of the proposals. Abstentions will also be counted in connection with the determination of whether a valid quorum is established and, with respect to the Business Combination Proposals and the Adjournment Proposal, will have no effect on the outcome of such proposals.

The transactions contemplated by the Business Combination Agreement, including the Merger, will be consummated only if the Business Combination Proposal is approved at the General Meeting.

 

Q:

How many votes do I have at the General Meeting?

 

A:

Noble shareholders are entitled to one vote on each proposal presented at the General Meeting for each Noble Share held of record as of April 8, 2022, the record date for the General Meeting. As of the close of business on the record date, there were 63,071,744 outstanding Noble Shares.

 

xvi


Table of Contents
Q:

What constitutes a quorum at the General Meeting?

 

A:

One or more shareholders who together represent at least a majority of the issued and outstanding Noble Shares entitled to vote at the General Meeting must be present, in person or represented by proxy, at the General Meeting to constitute a quorum and in order to conduct business at the General Meeting. Broker non-votes and abstentions will be counted as present for the purpose of determining a quorum. As of the record date for the General Meeting, the presence of 31,535,873 Noble Shares would be required to achieve a quorum. Noble directors, executive officers and their affiliates hold approximately .35% of the outstanding Noble Shares as of April 8, 2022.

 

Q:

What interests do Noble’s current officers and directors have in the Business Combination?

 

A:

Certain of Noble’s current officers and directors have interests in the Business Combination that are different from or in addition to (and which may conflict with) your interests. You should take these interests into account in deciding whether to approve the Business Combination Proposals. These interests include potential severance payments and benefits in connection with the Business Combination to certain of Noble’s executive officers and the fact that Robert W. Eifler will serve as the President and Chief Executive Officer of Topco, Richard B. Barker, William E. Turcotte, Joey M. Kawaia and Blake A. Denton, each an executive officer of Noble, will serve as executive officers of Topco, Charles M. (Chuck) Sledge, the current Chairman of the Noble Board, will become chairman of the Topco Board and Alan J. Hirshberg and Ann D. Pickard, each a director on the Noble Board, will be designated to the Topco Board by Noble upon Closing.

 

Q:

What happens if I vote against the Business Combination Proposal?

 

A:

If you vote against the Business Combination Proposal but the Business Combination Proposal still obtains the requisite approvals, then the Business Combination Proposal will be approved, and, assuming the satisfaction or waiver of the other conditions to the Closing, the Business Combination will be consummated in accordance with the terms of the Business Combination Agreement.

If you vote against the Business Combination Proposal and the Business Combination Proposal does not obtain the requisite approvals, then the Business Combination Proposal will fail and Noble will not consummate the Business Combination.

 

Q:

What are the U.S. federal income tax consequences to me of the Business Combination?

 

A:

In connection with the filing of the registration statement on Form S-4 of which this proxy statement/prospectus forms a part, Kirkland & Ellis LLP rendered to Noble its opinion to the effect that, based upon and subject to the assumptions, exceptions, limitations and qualifications set forth herein and in the tax opinion filed as an exhibit to the registration statement of which this proxy statement/prospectus forms a part, and the representations from Noble, Topco and Merger Sub, the Merger will qualify as a “reorganization” under Section 368(a) of the Code.

Assuming the Merger qualifies as a “reorganization” under Section 368(a) of the Code, U.S. Holders of Noble Shares that exchange such Noble Shares for Topco Shares in the Merger generally will not recognize gain or loss. However, U.S. federal income tax rules regarding reorganizations are complex and will depend on your particular circumstances.

For a more complete discussion of the U.S. federal income tax considerations of the Merger applicable to U.S. Holders, see the section entitled “Material Tax Considerations—Material U.S. Federal Income Tax Considerations to U.S. Holders—Tax Consequences of the Merger to U.S. Holders.”

All holders of Noble Shares are urged to consult their tax advisors regarding the tax consequences to them of the Merger, including the applicability and effect of U.S. federal, state, local and non-U.S. tax laws.

 

xvii


Table of Contents
Q:

Do I have appraisal rights or dissenters’ rights if I object to the proposed Business Combination?

 

A:

The Cayman Islands Companies Act provides that a shareholder of a Cayman company will be entitled to payment of the fair value of that person’s shares upon dissenting from a merger or consolidation. However, such rights are not available in respect of the shares of any class for which an open market exists on a recognized stock exchange or recognized interdealer quotation system at the expiry date of the period allowed for written notice of an election to dissent where, upon the merger or the consolidation, the shareholder receives, amongst other things, either: (a) shares of a surviving or consolidated company, or depository receipts in respect thereof; or (b) shares of any other company, or depository receipts in respect thereof, which shares or depository receipts at the effective date of the merger or consolidation, are either listed on a national securities exchange or designated as a national market system security on a recognized interdealer quotation system or held of record by more than two thousand holders. As a result, Noble does not expect Noble shareholders to have appraisal or dissent rights with respect to the Merger.

 

Q:

What conditions must be satisfied to complete the Business Combination?

 

A:

There are a number of conditions to the Closing in the Business Combination Agreement. Topco’s obligation to accept for payment or, subject to any applicable rules and regulations of Denmark, pay for any Maersk Drilling Shares that are validly tendered in the Offer and not validly withdrawn prior to the expiration of the Offer is subject to certain customary conditions, including, among others, that (a) the Minimum Acceptance Condition shall have been satisfied, (b) Noble shareholder approval of the Business Combination shall have been obtained, (c) no law shall be in effect that prohibits or makes illegal the consummation of the Business Combination, (d) the warranties of the parties being true and correct to the standards applicable to such warranties and each of the covenants of the parties having been performed or complied with in all material respects, (e) any applicable waiting period or approvals or clearances under applicable antitrust laws shall have expired or been earlier terminated or such approvals or clearances shall have been obtained, (f) any applicable waiting period or approvals or clearances under applicable foreign direct investment laws shall have expired or been earlier terminated or such approvals or clearances shall have been obtained, (g) the registration statement of which this proxy statement/prospectus and the exchange offer prospectus form a part and the Offering Circular shall have become effective under the Securities Act and the EU Prospectus Regulation, as applicable, and shall not be subject to an effective stop order or proceeding seeking a stop order, and (h) the Topco Shares issued in the Business Combination shall have been approved for listing on the NYSE and for admission to trading and official listing on Nasdaq Copenhagen, in each case, subject to official notice of issuance and, in the case of Nasdaq Copenhagen, final approval of the Offering Circular. Maersk Drilling may require that Topco not accept for payment or, subject to any applicable rules and regulations of Denmark, pay for the Maersk Drilling Shares that are validly tendered in the Offer and not validly withdrawn prior to the expiration of the Offer if certain customary conditions are not met, including, among others, those specified above. “The Business Combination Agreement and Ancillary DocumentsConditions to Closing of the Business Combination.”

 

Q:

What are the termination rights under the Business Combination Agreement?

The Business Combination Agreement contains certain termination rights for both Noble and Maersk Drilling, including, among others:

(a) by the mutual written consent of Noble and Maersk Drilling (provided that the parties will meet not less than 7 days prior to the End Date (as defined below) and, if the End Date is automatically extended as provided below, to meet again not less than 7 days prior to each revised End Date) to discuss the prospects of satisfying the conditions to the Offer, and to consider in good faith whether this termination right should be exercised);

(b) by either Noble or Maersk Drilling if:

 

   

(i) the Acceptance Time has not occurred on or before the End Date; provided, however, that if all of the conditions to the Offer, other than the condition relating to antitrust approvals,

 

xviii


Table of Contents
 

have been satisfied or are capable of being satisfied at such time, the End Date will automatically be extended to November 10, 2022; further provided that if all of the conditions to the Offer, other than the condition relating to antitrust approvals, have been satisfied or are capable of being satisfied at such time, the End Date will automatically be extended to February 10, 2023 and (ii) the party seeking to terminate the Business Combination Agreement pursuant to this bullet will not have breached its obligations under the Business Combination Agreement in any manner that has been the primary cause of the failure to consummate the Business Combination on or before such date;

 

   

any court of competent jurisdiction has issued or entered an order permanently enjoining or otherwise prohibiting the consummation of the Business Combination and such order has become final and non-appealable; provided that the party seeking to terminate the Business Combination Agreement pursuant to this bullet will have used such endeavors as required by the Business Combination Agreement to prevent, oppose and remove such injunction;

 

   

the Offer has terminated or expired in accordance with its terms (subject to the rights and obligations of Topco and Noble to extend the Offer pursuant to the Business Combination Agreement) without Topco having accepted for payment any shares of Maersk Drilling pursuant to the Offer; provided that the party seeking to terminate the Business Combination Agreement pursuant to this bullet will not have breached its obligations under the Business Combination Agreement in any manner that is the primary cause of the failure to consummate the Offer;

 

   

the Noble shareholders have not approved the Business Combination; or

 

   

a final merger control decision by either the UK CMA or the NCA is issued that either prohibits one or more of the transactions contemplated by the Business Combination Agreement, or prevents the consummation of such transactions without the carrying out of a Non-Required Remedy Action;

(c) by Maersk Drilling if:

(i) Noble or Merger Sub breaches or fails to perform in any material respect any of its warranties, covenants or other agreements in the Business Combination Agreement that cannot be or is not cured in accordance with the terms of the Business Combination Agreement and such breach or failure to perform would cause applicable closing conditions not to be satisfied; provided that Maersk Drilling is not then in material breach of any warranty, agreement or covenant in the Business Combination Agreement;

(ii) at any time prior to receipt of Noble shareholder approval if the Noble Board has changed its recommendation with respect to the Business Combination; or

(iii) certain actions are taken by the UK CMA, NCA or the European Commission (the “EC”) not earlier than May 1, 2022 (with respect to the UK CMA and EC) or July 1, 2022 (with respect to the NCA) (such dates, a “Trigger Date”) and not more than 30 days has passed from the applicable Trigger Date and Maersk Drilling becoming aware of the action so taken; or

(d) by Noble, (i) if Maersk Drilling breaches or fails to perform in any material respect any of its warranties, covenants or other agreements in the Business Combination Agreement that cannot be or is not cured in accordance with the terms of the Business Combination Agreement and such breach or failure to perform would cause applicable closing conditions not to be satisfied; provided that Noble is not then in material breach of any warranty, agreement or covenant in the Business Combination Agreement or (ii) at any time prior to the Acceptance Time if the Maersk Drilling Board has changed its recommendation with respect to the Offer.

If the Business Combination Agreement is terminated (a) (i) in accordance with the provision described in (1) the first bullet of clause (b) above (End Date), (2) the fourth bullet of clause (b) above (No Noble

 

xix


Table of Contents

Shareholder Approval), or (3) clause (c)(i) above due to a breach by Noble of its covenants relating to non-solicitation, holding the Noble shareholder meeting or endeavors to obtain regulatory approvals (Breach of Certain Noble Covenants); (ii) Noble or any other person has publicly disclosed or announced a competing alternative proposal with respect to Noble made on or after the date of the Business Combination Agreement but prior to the Noble shareholder meeting and such competing alternative proposal has not been withdrawn at least 5 days prior to the Noble shareholder meeting (or prior to the termination of the Business Combination Agreement if there has not been a shareholder meeting) and (iii) within 9 months of such termination, Noble consummates a competing acquisition proposal, or (b) by Maersk Drilling as a result of a change in recommendation by the Noble Board, then Noble will pay Maersk Drilling a termination fee equal to $15 million. Further, if the Business Combination Agreement is terminated by Maersk Drilling in accordance with the fifth bullet of clause (b) above (No Antitrust Approval), then Noble will pay Maersk Drilling a termination fee equal to $50 million.

If the Business Combination Agreement is terminated (a) (i) in accordance with the provision described in (1) the first bullet of clause (b) above (End Date), (2) the third bullet of clause (b) above (No Acceptance of Offer) or (3) clause (d)(i) above due to a breach by Maersk Drilling of its covenants relating to non-solicitation or endeavors to obtain regulatory approvals (Breach of Certain Maersk Drilling Covenants); (ii) Maersk Drilling or any other person has publicly disclosed or announced a competing alternative proposal with respect to Maersk Drilling made on or after the date of the Business Combination Agreement but prior to the termination date and such competing alternative proposal has not been withdrawn at least 5 days prior to the earlier of the expiration date of the Offer or termination of the Business Combination Agreement and (iii) within 9 months of such termination, Maersk Drilling consummates a competing acquisition proposal, or (b) by Noble as a result of a change in recommendation by the Maersk Drilling Board, then Maersk Drilling will pay Noble a termination fee equal to $15 million.

 

Q:

What happens if the Business Combination Agreement is terminated or the Business Combination is not consummated?

 

A:

There are certain circumstances under which the Business Combination Agreement may be terminated, including, among others, if the Acceptance Time has not occurred on or before August 10, 2022 (the “End Date”); provided, however, that if all of the conditions to the Offer, other than the condition relating to antitrust approvals, have been satisfied or are capable of being satisfied at such time, the End Date will automatically be extended to November 10, 2022; further provided that if all of the conditions to the Offer, other than the condition relating to antitrust approvals, have been satisfied or are capable of being satisfied at such time, the End Date will automatically be extended to February 10, 2023.

If the Business Combination Agreement is terminated by Maersk Drilling because a final merger control decision by a governmental entity is issued that either prohibits one or more of the transactions contemplated by the Business Combination Agreement, or prevents the consummation of such transactions without the carrying out of certain actions, then Noble will be required to pay Maersk Drilling a termination fee of $50 million. Further, if the Business Combination Agreement is terminated under certain other specified circumstances, Noble or Maersk Drilling may be required to pay the other party a termination fee equal to $15 million.

If the Business Combination Agreement is terminated or if the Business Combination is not consummated for any other reason, Noble shareholders will not receive any payment for their Noble Shares in connection with the Business Combination. Instead, Noble will remain an independent public company, and the Noble Shares will continue to be listed and traded on NYSE and registered under the Exchange Act and Noble will continue to file periodic reports with the SEC.

Please see the section entitled “The Business Combination Agreement and Ancillary Documents” for more information regarding the parties’ specific termination rights and the termination fees under these agreements.

 

xx


Table of Contents
Q:

When is the Business Combination expected to be completed?

 

A:

Subject to the satisfaction or waiver of the conditions set forth in the Business Combination Agreement, the Business Combination is expected to close in mid-2022.

For a description of the conditions to the completion of the Business Combination, see the section entitled “The Business Combination Agreement and Ancillary DocumentsConditions to Closing of the Business Combination.”

 

Q:

What do I need to do now?

 

A:

You are urged to read carefully and consider the information contained in this proxy statement/prospectus, including the Annexes, and to consider how the Business Combination will affect you as a shareholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card or, if you hold your Noble Shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

 

Q:

How do I vote?

 

A:

If you were a holder of record of Noble Shares on April 8, 2022, the record date for the General Meeting, you may vote with respect to the proposals in person at the General Meeting, or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

Voting by Mail. By signing the proxy card and returning it in the enclosed prepaid and addressed envelope, you are authorizing the individuals named on the proxy card to vote your Noble Shares at the General Meeting in the manner you indicate. You are encouraged to sign and return the proxy card even if you plan to attend the General Meeting so that your Noble Shares will be voted if you are unable to attend the General Meeting. If you receive more than one proxy card, it is an indication that your Noble Shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your Noble Shares are voted. Votes submitted by mail must be received by 5:00 p.m., New York City time, on May 9, 2022.

Voting in Person at the Meeting. If you attend the General Meeting and plan to vote in person, you will be provided with a ballot at the General Meeting. If your Noble Shares are registered directly in your name, you are considered the shareholder of record and you have the right to vote in person at the General Meeting. If you hold your Noble Shares in “street name,” which means your Noble Shares are held of record by a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or nominee to ensure that votes related to the Noble Shares you beneficially own are properly counted. In this regard, you must provide the record holder of your Noble Shares with instructions on how to vote your Noble Shares or, if you wish to attend the General Meeting and vote in person, you will need to bring to the General Meeting a legal proxy from your broker, bank or nominee authorizing you to vote these Noble Shares. For additional information, please see the section entitled “General Meeting of Noble Shareholders.”

 

Q:

What will happen if I abstain from voting or fail to vote at the General Meeting?

 

A:

At the General Meeting, a properly executed proxy marked “ABSTAIN” with respect to a particular proposal will be counted as present for purposes of determining whether a quorum is present. For purposes of approval, abstentions will not count as votes cast at the meeting with respect to the Business Combination Proposals and the Adjournment Proposal and, therefore, will have no effect on the outcome of such proposals.

 

xxi


Table of Contents
Q:

What will happen if I sign and return my proxy card without indicating how I wish to vote?

 

A:

Signed and dated proxies received by Noble without an indication of how the shareholder intends to vote on a proposal will be voted “FOR” each proposal presented to the shareholders. The proxyholders may use their discretion to vote on any other matters which properly come before the General Meeting.

 

Q:

If I am not going to attend the General Meeting in person, should I return my proxy card instead?

 

A:

Yes. Whether you plan to attend the General Meeting or not, please read the enclosed proxy statement/prospectus carefully, and vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

 

Q:

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

 

A:

No. Under the rules of various national securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee.

Noble believes that all of the proposals presented to the shareholders at this General Meeting will be considered non-discretionary and, therefore, your broker, bank, or nominee cannot vote your shares without your instruction on any of the proposals presented at the General Meeting. If you do not provide instructions with your proxy card, your broker, bank, or other nominee may deliver a proxy card expressly indicating that it is NOT voting your shares. This indication that a broker, bank, or nominee is not voting your shares is referred to as a “broker non-vote.” Broker non-votes will be counted for the purposes of determining the existence of a quorum but will not be counted for purposes of determining the number of votes cast at the General Meeting. Your broker, bank or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker, bank or other nominee to vote your shares in accordance with directions you provide.

 

Q:

May I change my vote after I have mailed my signed proxy card?

 

A:

Yes. You may change your vote by sending a later-dated, signed proxy card to Noble at the address listed below so that it is received by Noble prior to the General Meeting or attend the General Meeting in person and vote. You also may revoke your proxy by sending a notice of revocation to Noble, which must be received by Noble prior to the General Meeting.

 

Q:

What should I do if I receive more than one set of voting materials?

 

A:

You may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.

 

Q:

Who will solicit and pay the cost of soliciting proxies for the General Meeting?

 

A:

Noble will pay the cost of soliciting proxies for the General Meeting. Noble has engaged Innisfree M&A Incorporated to assist in the solicitation of proxies for the General Meeting. Noble has agreed to pay Innisfree M&A Incorporated a fee of $35,000, plus disbursements, and will reimburse Innisfree M&A Incorporated for its reasonable out-of-pocket expenses and indemnify Innisfree M&A Incorporated and its affiliates against certain claims, liabilities, losses, damages and expenses. Noble will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of Noble Shares for their expenses in forwarding soliciting materials to beneficial owners of Noble Shares and in obtaining

 

xxii


Table of Contents
  voting instructions from those owners. The directors, officers and employees of Noble may also solicit proxies by telephone, by facsimile, by mail, on the Internet, or in person. They will not be paid any additional amounts for soliciting proxies.

 

Q:

Who can help answer my questions?

 

A:

If you have questions about the proposals or if you need additional copies of this proxy statement/prospectus or the enclosed proxy card you should contact:

Noble Corporation

13135 Dairy Ashford, Suite 800

Sugar Land, Texas 77478

(281) 276-6100

Attention: Craig M. Muirhead

Email: investors@noblecorp.com

You may also contact the proxy solicitor for Noble at:

Innisfree M&A Incorporated

Shareholders in the US and Canada, please call toll-free: (877) 750-8240

Shareholders in other locations please call: +1 (412) 232-3651

Banks and brokerage, please call collect: (212) 750-5833

To obtain timely delivery, Noble shareholders must request the materials no later than May 3, 2022, or five business days prior to the General Meeting.

You may also obtain additional information about Noble from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.”

 

xxiii


Table of Contents

SUMMARY

This summary highlights selected information contained in this proxy statement/prospectus and the exchange offer prospectus and does not contain all of the information that is important to you. You should read carefully this entire proxy statement/prospectus and the exchange offer prospectus, including the Annexes and accompanying financial statements of Noble and Maersk Drilling, to fully understand the proposed Business Combination before voting on the proposals to be considered at the General Meeting. Please see the section entitled “Where You Can Find More Information.”

Parties to the Business Combination

Noble

Noble is a leading offshore drilling contractor for the oil and gas industry. Noble provides contract drilling services to the international oil and gas industry with its global fleet of mobile offshore drilling units. Noble’s business strategy focuses on a high-specification fleet of both floating and jackup rigs and the deployment of drilling rigs in established and emerging offshore oil and gas basins around the world. Noble and its predecessors have been engaged in the contract drilling of oil and gas wells since 1921.

The mailing address of Noble’s principal executive office is 13135 Dairy Ashford, Suite 800, Sugar Land, Texas 77478, and its telephone number is (281) 276-6100.

Maersk Drilling

Maersk Drilling is a leading player in the offshore contract drilling industry providing offshore drilling services to customers exploring for or producing oil and/or natural gas in support of their (upstream) exploration and development activities. Maersk Drilling’s business strategy revolves around a leading sustainability ambition, the delivery of safe, efficient, and reliable drilling services, primarily in harsh and deepwater environments. Its business model is built upon multiple mutually-reinforcing components summarized as advanced technology, operational excellence, and customer-centricity. This has been developed over decades of working towards a vision of driving improved offshore well economics for customers.

The mailing address of Maersk Drilling’s principal executive office is Lyngby Hovedgade 85, DK-2800 Kongens Lyngby, Denmark, and its telephone number is +45- 63 36 00 00.

Topco

Topco is a private limited company formed under the laws of England and Wales. To date, Topco does not own any material business assets or operate any business. Topco will re-register as a public limited company prior to the Offer being made. Upon consummation of the Business Combination, Topco will own the businesses of Noble, Maersk Drilling and their respective subsidiaries. Topco will be renamed “Noble Corporation” at the Closing and the Topco Shares will be listed on NYSE and Nasdaq Copenhagen.

The mailing address of Topco’s principal executive office prior to the closing of the Business Combination is 13135 Dairy Ashford, Suite 800, Sugar Land, Texas 77478. The mailing address of Topco’s principal executive office after the closing of the Business Combination will be 13135 Dairy Ashford, Suite 800, Sugar Land, Texas 77478, and its telephone number is (281) 276-6100.

Merger Sub

Merger Sub is a Cayman Islands exempted company and a direct, wholly owned subsidiary of Topco, formed for the purpose of effecting the Business Combination. Merger Sub does not own any material business

 

1


Table of Contents

assets or operate any business. As part of the Business Combination, Noble will merge with and into Merger Sub, with Merger Sub continuing as the surviving entity and as a wholly-owned subsidiary of Topco.

The mailing address of Merger Sub’s registered office is Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, and its telephone number is (345) 814-5305.

The Business Combination

General

On November 10, 2021, Noble entered into the Business Combination Agreement, pursuant to which, among other things, (i) (x) Noble will merge with and into Merger Sub, with Merger Sub surviving the Merger as a wholly owned subsidiary of Topco and (y) the Noble Shares will convert into an equivalent number of Topco Shares, and (ii) (x) Topco will make the Offer and (y) upon the consummation of the Offer, if more than 90% of the issued and outstanding Maersk Drilling Shares are acquired by Topco, Topco will redeem any Maersk Drilling Shares not exchanged in the Offer by Topco for, at the election of the holder, either Topco Shares or cash (or, for those holders that do not make an election, only cash), under Danish law by way of the Compulsory Purchase.

The Merger

As further described in this proxy statement/prospectus and the exchange offer prospectus, subject to the terms and conditions of the Business Combination Agreement, in connection with the Merger:

 

   

each Noble Share issued and outstanding immediately prior to the Merger Effective Time will be converted into one newly and validly issued, fully paid and non-assessable Topco Share;

 

   

each Penny Warrant issued and outstanding immediately prior to the Merger Effective Time will cease to represent the right to acquire Noble Shares and shall be automatically cancelled, converted into and exchanged for a number of Topco Shares equal to the number of Noble Shares underlying such Penny Warrant, rounded to the nearest whole share;

 

   

each Noble Warrant issued and outstanding immediately prior to the Merger Effective Time will be converted automatically into a Topco Warrant to acquire a number of Topco Shares equal to the number of Noble Shares underlying such Noble Warrant, with the same terms as were in effect immediately prior to the Merger Effective Time under the terms of the applicable Noble Warrant Agreement; and

 

   

each Noble RSU Award that is outstanding immediately prior to the Merger Effective Time will cease to represent a right to acquire Noble Shares (or value equivalent to Noble Shares) and will be exchanged for restricted share units representing the right to acquire, on the same terms and conditions as were applicable under the Noble RSU Award (including any vesting conditions), that number of Topco Shares equal to the number of Noble Shares subject to such Noble RSU Award immediately prior to the Merger Effective Time.

The Offer

As further described in the exchange offer prospectus and subject to the terms and conditions set forth in the Business Combination Agreement, following the approval of certain regulatory filings with the DFSA, Topco has agreed to commence the Offer to acquire up to 100% of the then outstanding Maersk Drilling Shares and voting rights of Maersk Drilling, not including any treasury shares held by Maersk Drilling. The Offer is conditioned upon, among other things, holders of at least 80% of the then outstanding Maersk Drilling Shares and voting rights of Maersk Drilling tendering their shares in the Offer (which percentage may be lowered by Topco in its sole discretion to not less than 70%). In the Offer, Maersk Drilling shareholders may exchange each Maersk

 

2


Table of Contents

Drilling share for 1.6137 newly and validly issued, fully paid and non-assessable Topco Shares, and will have the ability to elect cash consideration for up to $1,000 of their Maersk Drilling Shares (payable in DKK), subject to an aggregate cash consideration cap of $50 million. A Maersk Drilling shareholder electing to receive the cash consideration will receive, as applicable, (i) $1,000 for the applicable portion of their Maersk Drilling Shares, or (ii) the amount corresponding to the total holding of their Maersk Drilling Shares if such holding of Maersk Drilling Shares represents a value of less than $1,000 in the aggregate, subject to any reduction under the cap described in the preceding sentence. A Maersk Drilling shareholder holding Maersk Drilling Shares exceeding a value of $1,000 in the aggregate cannot elect to receive less than $1,000 in cash consideration if the cash consideration in lieu of Topco Shares is elected. Each of Maersk Drilling and Topco will take steps to procure that each Maersk Drilling RSU Award that is outstanding immediately prior to the Acceptance Time is exchanged, at the Acceptance Time, with the right to receive, on the same terms and conditions as were applicable under the Maersk Drilling LTI (including any vesting conditions), that number of Topco Shares equal to the product of (1) the number of Maersk Drilling Shares subject to such Maersk Drilling RSU Award immediately prior to the Acceptance Time and (2) the Exchange Ratio, with any fractional Maersk Drilling Shares rounded to the nearest whole share. Upon conversion such Maersk Drilling RSU Awards will cease to represent a right to receive Maersk Drilling Shares (or value equivalent to Maersk Drilling Shares).

For more information about the Business Combination, please see the sections entitled “The Business Combination, “Description of the Exchange Offer”, andThe Business Combination Agreement and Ancillary Documents.” A copy of the Business Combination Agreement is attached to this proxy statement/prospectus and the exchange offer prospectus as Annex A.

Corporate Governance

Following the Closing, assuming all of the Maersk Drilling Shares are acquired by Topco through the Offer, Topco will own all of Noble’s and Maersk Drilling’s respective businesses and the former shareholders of Noble and former shareholders of Maersk Drilling will each own approximately 50% of the outstanding Topco Shares. Topco will acquire a majority of the Maersk Drilling Shares following the Closing of the Offer and it is possible that Topco will directly or indirectly own other assets and conduct other activities in the future at the discretion of Topco management. Topco will be renamed Noble Corporation Plc, will be a public limited company domiciled (tax resident) in the United Kingdom and will be headquartered in Houston, Texas. Topco is expected to have certain management functions relating to the holding of shares, financing, cash management, incentive compensation and other relevant holding company functions. The Topco Board will initially be comprised of seven individuals: three individuals designated by Maersk Drilling (Claus V. Hemmingsen, the current Chairman of the Maersk Drilling Board, Kristin H. Holth and Alastair Maxwell), three individuals designated by Noble (Charles M. (Chuck) Sledge, the current Chairman of the Noble Board, who will become Chairman of the combined company, Alan J. Hirshberg and Ann D. Pickard) and Robert W. Eifler, the Chief Executive Officer of Noble, who will serve as the Chief Executive Officer of the combined company.

Topco will apply to have the Topco Shares listed on the NYSE and on Nasdaq Copenhagen.

 

3


Table of Contents

Organizational Structure

The following diagram illustrates the pre-Business Combination organizational structure of Noble:

 

LOGO

 

(1)

Includes Topco.

The following diagram illustrates the pre-Business Combination organizational structure of Maersk Drilling:

 

LOGO

 

4


Table of Contents

The following diagram illustrates the structure of Topco immediately following the Business Combination:

 

LOGO

 

(1)

Assumes all of the issued and outstanding Maersk Drilling Shares are tendered in the Offer.

Conditions to Closing of the Business Combination

Topco’s obligation to accept for payment or, subject to any applicable rules and regulations of Denmark, pay for any Maersk Drilling Shares that are validly tendered in the Offer and not validly withdrawn prior to the expiration of the Offer is subject to certain customary conditions, including, among others, that (a) the Minimum Acceptance Condition shall have been satisfied, (b) Noble shareholder approval of the Business Combination shall have been obtained, (c) no law shall be in effect that prohibits or makes illegal the consummation of the Business Combination, (d) the warranties of the parties being true and correct to the standards applicable to such warranties and each of the covenants of the parties having been performed or complied with in all material respects, (e) any applicable waiting period or approvals or clearances under applicable antitrust laws shall have expired or been earlier terminated or such approvals or clearances shall have been obtained, (f) any applicable waiting period or approvals or clearances under applicable foreign direct investment laws shall have expired or been earlier terminated or such approvals or clearances shall have been obtained, (g) the registration statement of which this proxy statement/prospectus and the exchange offer prospectus form a part and the Offering Circular

 

5


Table of Contents

shall have become effective under the Securities Act, and the EU Prospectus Regulation, as applicable, and are not subject to an effective stop order or proceeding seeking a stop order, and (h) the Topco Shares issued in the Business Combination shall have been approved for listing on the NYSE and for admission to trading and official listing on Nasdaq Copenhagen, in each case, subject to official notice of issuance and, in the case of Nasdaq Copenhagen, final approval of the Offering Circular. Maersk Drilling may require that Topco does not accept for payment or, subject to any applicable rules and regulations of Denmark, pay for the Maersk Drilling Shares that are validly tendered in the Offer and not validly withdrawn prior to the expiration of the Offer if certain customary conditions are not met, including, among others, those specified above.

The obligations of the parties to the Business Combination Agreement to consummate the Business Combination are subject to additional conditions and termination rights, as described more fully below in the sections entitled “The Business Combination Agreement and Ancillary Documents — Conditions to Closing of the Business Combination and “The Business Combination Agreement and Ancillary Documents — Termination Rights.”

Ancillary Documents

Irrevocable Undertaking

Concurrently with the entry into the Business Combination Agreement, APMH Invest, which holds approximately 41.6% of the issued and outstanding Maersk Drilling Shares, entered into the Undertaking with Noble, Topco and Maersk Drilling, pursuant to which APMH Invest has, among other things, agreed to (a) accept the Offer in respect of the Maersk Drilling Shares that it owns and not withdraw such acceptance; (b) waive the right to receive any cash consideration in the Offer; (c) not vote in favor of any resolution to approve a competing alternative proposal and (d) subject to certain exceptions, be bound by certain transfer restrictions with respect to the Maersk Drilling Shares that it owns. The Undertaking will lapse if (i) the Business Combination Agreement is terminated in accordance with its terms; (ii) Topco announces that it does not intend to make or proceed with the Business Combination or (iii) the Offer lapses or is withdrawn and no new, revised or replacement offer is announced within 10 business days.

Letters of Intent

In addition, certain other Maersk Drilling shareholders, together holding approximately 12% of the issued and outstanding Maersk Drilling Shares, have delivered letters of intent expressing their intention to accept or procure the acceptance of the Offer in respect of the Maersk Drilling Shares that they own.

Voting Agreements

Concurrently with the entry into the Business Combination Agreement, Noble and Maersk Drilling entered into the Voting Agreements with the Noble Supporting Shareholders, which collectively held approximately 53% of the issued and outstanding Noble Shares as of the date of the Voting Agreements. Pursuant to the Voting Agreements, each Noble Supporting Shareholder has, among other things, agreed to (a) consent to and vote (or cause to be voted) its Noble Shares (i) in favor of all matters, actions and proposals contemplated by the Business Combination Agreement for which Noble shareholder approval is required and any other matters, actions or proposals required to consummate the Business Combination in accordance with the Business Combination Agreement, and (ii) among other things, against any competing alternative proposal; (b) be bound by certain other covenants and agreements relating to the Business Combination and (c) subject to certain exceptions, be bound by certain transfer restrictions with respect to a portion of their securities. The Voting Agreements will terminate upon the earliest to occur of (x) the date that is ten months from the date of the Voting Agreements, (y) the closing date of the Business Combination and (z) the termination of the Business Combination Agreement pursuant to its terms. Notwithstanding the foregoing, each Noble Supporting Shareholder will have the right to

 

6


Table of Contents

terminate the applicable Voting Agreement if the Business Combination Agreement has been amended in a manner that materially and adversely affects such Noble Supporting Shareholder (including, without limitation, a reduction of the economic benefits to the Noble Supporting Shareholders contemplated thereby or an extension of the End Date beyond the date (as such date may be extended) set forth in the Business Combination Agreement).

Relationship Agreement

At the Closing, Topco will enter into the Relationship Agreement with the Investor Manager and APMH Invest, which will set forth certain director designation rights of such Topco shareholders following the Closing. In particular, pursuant to the Relationship Agreement, each of the Investor Manager and APMH Invest will be entitled to designate (a) two nominees to the Topco Board so long as the Investor Manager or APMH Invest, as applicable, owns no fewer than 20% of the then outstanding Topco Shares and (b) one nominee to the Topco Board so long as the Investor Manager or APMH Invest, as applicable, owns fewer than 20% but no fewer than 15% of the then outstanding Topco Shares. Each nominee of the Investor Manager and APMH Invest will meet the independence standards of the NYSE with respect to Topco; provided, however, that APMH Invest shall be permitted to have one nominee who does not meet such independence standards so long as such nominee is not an employee of Topco or any of its subsidiaries.

Registration Rights Agreement

At the Closing, Topco will enter into the RRA with APMH Invest pursuant to which, among other things, and subject to certain limitations set forth therein, APMH Invest will have customary demand and piggyback registration rights. In addition, pursuant to the RRA, APMH Invest will have the right to require Topco, subject to certain limitations set forth therein, to effect a distribution of any or all of its Topco Shares by means of an underwritten offering. Topco is not obligated to effect any underwritten offering unless the dollar amount of the securities of APMH Invest to be sold is reasonably likely to result in gross sale proceeds of at least $20 million.

Opinion of Noble’s Financial Advisor (see page 95)

At the meeting of the Noble Board on November 9, 2021, Ducera Securities LLC (“Ducera”) delivered its oral opinion to the Noble Board, which was subsequently confirmed in writing, to the effect that, as of the date of such opinion, and subject to the assumptions, limitations, qualifications and conditions described in such opinion, the Merger Consideration was fair, from a financial point of view, to the holders of Noble Shares (other than Noble Shares held by Maersk Drilling or its affiliates).

The full text of the written opinion of Ducera, dated as of November 9, 2021, is attached as Annex G to this proxy statement/prospectus. The opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications, conditions and limitations on the scope of the review undertaken by Ducera in rendering its opinion. Ducera’s opinion is directed to the Noble Board and addresses only the fairness, from a financial point of view, of the Merger Consideration to the holders of Noble Shares (other than Noble Shares held by Maersk Drilling or its affiliates). It does not constitute a recommendation to the Noble Board or to any other persons in respect of the Transaction, including as to how any holder of Noble Shares should vote or act in respect of the Merger.

For a further discussion of Ducera’s opinion, see the section entitled “The Business Combination—Opinion of Noble’s Financial Advisor” and Annex G.

Opinion of Maersk Drilling’s Financial Advisor (see page 103)

Pursuant to an engagement letter, Maersk Drilling retained J.P. Morgan Securities plc (“J.P. Morgan”) as its financial advisor in connection with the proposed Business Combination.

 

7


Table of Contents

At the meeting of the Maersk Drilling Board on November 9, 2021, J.P. Morgan rendered its oral opinion to the Maersk Drilling Board that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing its opinion, the consideration to be paid to the holders of the Maersk Drilling Shares in the proposed Business Combination was fair, from a financial point of view, to such holders. J.P. Morgan has confirmed its November 9, 2021 oral opinion by delivering its written opinion, dated as of November 10, 2021, to the Maersk Drilling Board that, as of such date, and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing its opinion, the consideration to be paid to the holders of the Maersk Drilling Shares in the proposed Business Combination was fair, from a financial point of view, to such holders.

The full text of the written opinion of J.P. Morgan, dated as of November 10, 2021, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing its opinion, is attached as Annex H to this proxy statement/prospectus and the exchange offer prospectus and is incorporated herein by reference. The summary of the opinion of J.P. Morgan set forth in this proxy statement/prospectus and the exchange offer prospectus is qualified in its entirety by reference to the full text of such opinion. Any recipient of this summary of the opinion of J.P. Morgan is urged to read the opinion in its entirety. J.P. Morgan’s opinion was addressed to the Maersk Drilling Board (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed Business Combination, was directed only to the consideration to be paid to the holders of the Maersk Drilling Shares in the proposed Business Combination and did not address any other aspect of the proposed Business Combination. J.P. Morgan expressed no opinion as to the fairness of any consideration to be paid in connection with the proposed Business Combination to the holders of any other class of securities, creditors or other constituencies of Maersk Drilling, or as to the underlying decision by Maersk Drilling to engage in the proposed Business Combination. The issuance of J.P. Morgan’s opinion was approved by a valuation committee of J.P. Morgan. The opinion does not constitute a recommendation to any shareholder of Maersk Drilling as to whether such shareholder should tender its Maersk Drilling Shares in the Offer or how such shareholder should vote with respect to the proposed Business Combination or any other matter. For a description of the opinion that the Maersk Drilling Board received from J.P. Morgan, see the section entitled “The Business Combination—Opinion of Maersk Drilling’s Financial Advisor”.

Noble Board’s Reasons for the Business Combination

The Noble Board considered a number of factors pertaining to the Business Combination as generally supporting its decision to enter into the Business Combination Agreement and the transactions contemplated thereby, including but not limited to, the following material factors:

Strategic factors considered by the Noble Board:

 

   

World-class offshore driller. The transaction creates the youngest and highest specification fleet of scale featuring seventh generation ultra-deepwater drillships and harsh environment jackups with a combined track record of industry-leading utilization. The scale and modernity of the fleet is expected to enable the combined company to operate more efficiently. The combined company will also be attractively diversified across asset classes, geographic regions and customers.

 

   

Accretive to all shareholders. The transaction is expected to result in $125 million of run-rate annual cost synergies within two years post-closing, with value beginning to be realized in the near term post-closing. The transaction is thus expected to be highly accretive to free cash flow per share for both Noble and Maersk Drilling shareholders in the first full year post-closing. The streamlined cost structure is also expected to further the combined company’s cost-competitiveness.

 

8


Table of Contents
   

Enhanced customer experience and sustainability. Like Noble, Maersk Drilling has demonstrated a strong commitment to best-in-class safety performance and customer satisfaction. The modern fleet is expected to provide a robust platform for technical innovation in addition to enabling the combined company to be a first mover in sustainability initiatives.

 

   

Platform for strong cash flow generation and distribution. The combined company has a normalized free cash flow potential of $375 million in 2023 and onward. Additionally, the combined company is expected to have a best-in-class balance sheet with low leverage and significant liquidity, including approximately $900 million of cash, which will facilitate the return of capital to shareholders. Given the efficiency of its fleet and synergies, the combined company is also expected to have the potential to grow its cash flows faster as the global offshore market recovery continues.

 

   

Balanced corporate governance and leadership. The Topco Board will initially be comprised of seven individuals: three individuals designated by Maersk Drilling (Claus V. Hemmingsen, the current Chairman of the Maersk Drilling Board, Kristin H. Holth and Alastair Maxwell), three individuals designated by Noble (Charles M. (Chuck) Sledge, the current Chairman of the Noble Board, who will become Chairman of the combined company, Alan J. Hirshberg and Ann D. Pickard) and Robert W. Eifler, the Chief Executive Officer of Noble, who will serve as the Chief Executive Officer of the combined company.

Other potentially favorable factors considered by the Noble Board:

 

   

Improved business climate. The current and prospective business climate in the offshore drilling industry, including the regulatory environment, has improved dramatically since the initial outbreak of COVID-19 and the combined company will be well-positioned among likely competitors.

 

   

Due diligence. The favorable results of the due diligence review of Maersk Drilling and its business conducted by Noble and its financial advisors and outside legal counsel.

 

   

Business Combination Agreement. The view that the terms and conditions of the Business Combination Agreement, including the covenants, closing conditions and termination provisions, are favorable to completing the transaction.

 

   

Fairness opinion. Ducera’s oral opinion delivered on November 9, 2021, subsequently confirmed in writing, to the effect that, as of such date and subject to the assumptions, limitations, qualifications and other matters considered in the preparation thereof, the Merger Consideration was fair, from a financial point of view, to the holders of Noble Shares (other than Noble Shares held by Maersk Drilling or its affiliates).

 

   

Alternatives available. Potential strategic alternatives that might be available to Noble relative to the transaction, including remaining a standalone entity or other acquisition opportunities and the belief of the Noble Board that the transaction is in the best interests of Noble and its shareholders given the potential risks, rewards and uncertainties associated with each alternative, including execution and regulatory risks and achievement of anticipated synergies.

Risks and potentially negative factors considered by the Noble Board:

 

   

Integration risk. There are significant risks inherent in combining and integrating two companies, including that the companies may not be successfully integrated or that the expected synergies from combining the two companies may not be realized, and that successful integration of the companies will require the dedication of significant management resources, which will temporarily detract attention from the day-to-day businesses of the combined company.

 

   

Failure to realize anticipated benefits. There are uncertainties in timing and execution with respect to the anticipated benefits of the transaction.

 

9


Table of Contents
   

Implied premium. The equity being provided to Maersk Drilling’s shareholders based on the exchange ratio implies a premium of 28% to the trading price of Maersk Drilling shares as of the last trading date prior to the announcement of the transaction.

 

   

Fixed exchange ratio. The tender offer consideration to be received by holders of Maersk Drilling shares consists of shares based on a fixed exchange ratio and consequently the value of the consideration to be received by Maersk Drilling shareholders may increase.

 

   

Termination fees. The Business Combination Agreement provides that, in certain circumstances relating to the failure to receive necessary regulatory approvals from antitrust authorities, Noble could be required to pay a termination fee of $50 million to Maersk Drilling and, in certain other circumstances, a termination fee equal to $15 million.

 

   

Regulatory risk. The risk that regulatory approvals necessary to consummate the transaction may be delayed or not granted, which may delay or jeopardize the transaction, or that a regulatory or other body imposes restrictions or requires divestitures in connection with the transaction, compliance with which would be necessary but could adversely impact the business of the combined company.

 

   

Tender offer acceptance. Maersk Drilling’s obligation to close the transaction is conditioned on 80% of the then outstanding Maersk Drilling shares and voting rights of Maersk Drilling (which percentage may be lowered by Topco in its sole discretion to not less than 70%) being validly tendered.

 

   

Restrictions on Noble’s activities. The restrictions on Noble prior to the consummation of the transaction with respect to taking actions outside the ordinary course of business, which may delay or prevent Noble from undertaking opportunities that may arise or other actions it would otherwise take pending consummation of the transaction.

 

   

Transaction costs. The substantial costs to be incurred in connection with the transaction, including the costs of integrating the businesses of Noble and Maersk Drilling and the transaction costs to be incurred in connection with the transaction.

 

   

Termination Fee. The $15 million termination fee that Maersk Drilling would be required to pay under the Business Combination Agreement upon termination of the Business Combination Agreement under certain circumstances would be insufficient to compensate Noble for its costs incurred in connection with the Business Combination Agreement.

 

   

Inability to retain employees. The possibility of losing key employees and skilled workers as a result of the transaction and the expected consolidation of Noble and Maersk Drilling personnel.

 

   

Loss of customers. The possibility of customer overlap or that key customers may choose not to do business with the combined company.

 

   

Pace of decarbonization. The pace and extent of the energy transition could pose a risk to the combined company and result in lower demand for its services. The combined company’s engagement in the energy transition may be unsuccessful or slower than investors, customers and other stakeholders prefer, which could adversely impact the combined company’s share price, reputation and demand for its products. In its efforts to facilitate decarbonization, the combined company risks investing in technologies, markets or low-carbon products that are unsuccessful or less profitable because there is limited demand for them or they result in higher costs.

The Noble Board also expects that a growing share of the combined company’s greenhouse gas emissions will be subject to regulation, resulting in increased compliance costs and operational restrictions. Regulators may seek to limit certain fossil fuel projects or make it more difficult to obtain required permits, which could have an impact on the realization of projected operating results and synergies. Additionally, investors may limit funds available for investment in companies engaged in the oil and gas industry.

 

   

Other risks. Other risks of the type and nature described under “Risk Factors.”

 

10


Table of Contents

The foregoing discussion of information and factors considered by the Noble Board is not exhaustive, but the Noble Board believes it includes the material factors considered by the Noble Board. In view of the wide variety of factors considered in connection with their evaluation of the transaction and the complexity of these matters, the Noble Board did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative or specific weight or values to any of these factors. Rather, the Noble Board viewed their position and recommendation as being based on an overall analysis and on the totality of the information presented to and factors considered by them. In addition, in considering the factors described above, individual directors may have given different weights to different factors.

The factors contained in this explanation of the Noble Board’s reasons for the transaction and other information presented in this section of the proxy statement/prospectus contain information that is forward- looking in nature and, therefore, should be read in light of the factors discussed in “General Information—Cautionary Note Regarding Forward-Looking Statements”.

The Noble financial forecasts and Noble’s management’s forecasts for Maersk Drilling were prepared by Noble in connection with the proposed transaction prior to execution of the Business Combination Agreement.

These financial forecasts were prepared by, and are the responsibility of, Noble’s management. Neither PricewaterhouseCoopers LLP, Noble’s independent registered public accounting firm, nor any other independent accountant, have audited, reviewed, examined, compiled nor applied agreed-upon procedures with respect to the Noble financial forecasts or Noble’s management’s forecasts for Maersk Drilling and, accordingly, neither PricewaterhouseCoopers LLP nor any other independent accountants express an opinion or any other form of assurance with respect thereto. The report of PricewaterhouseCoopers LLP incorporated by reference in this proxy statement/prospectus and the exchange offer prospectus relates to Noble’s previously issued financial statements. The foregoing report does not extend to the Noble financial forecasts or Noble’s management’s forecasts for Maersk Drilling and should not be read to do so.

Please see the section entitled “The Business Combination—The Noble Board’s Reasons for the Business Combination” for additional information.

Maersk Drilling Board’s Reasons for the Business Combination

After due consideration and consultation with its outside legal and financial advisors, the Maersk Drilling Board, in its meeting held on November 9, 2021, determined that the Business Combination, the Business Combination Agreement and the transactions contemplated therein are in the best interest of Maersk Drilling and its shareholders and unanimously approved the Business Combination Agreement. In reaching its decision, the Maersk Drilling Board considered a number of factors in connection with its evaluation of the proposed transactions, including significant strategic opportunities, potential cost synergies and expected strengths of the combined company, as supporting their decision to approve the entry by Maersk Drilling into the Business Combination Agreement and to approve and declare advisable the transactions contemplated thereby.

See “The Business Combination—The Maersk Drilling Board’s Reasons for the Business Combination” for a discussion of the factors considered by the Maersk Drilling Board.

The General Meeting of Noble Shareholders

Date, Time and Place of General Meeting

The General Meeting will be held at 9:00 a.m., Central Time, on May 10, 2022 at NobleAdvances Training and Collaboration Center, 12550 Reed Rd., Ste. 200, Sugar Land, Texas 77478, or such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the proposals.

 

11


Table of Contents

Proposals

At the General Meeting, Noble shareholders will be asked to consider and vote on:

 

1.

Business Combination Proposal—To approve, as a special resolution, the entry by Noble into the Business Combination Agreement and the consummation of the transactions contemplated thereby, including the Business Combination (Proposal No. 1);

 

2.

NYSE Proposal—To approve, as an ordinary resolution, assuming the Business Combination Proposal is approved and adopted, for the purposes of complying with the applicable listing rules of the NYSE, the issuance of the Topco Shares in connection with the Business Combination (Proposal No. 2);

 

3.

Advisory Compensation Proposal—To adopt and approve, as an ordinary resolution, on a non-binding advisory basis, certain compensation that may be paid or become payable to Noble’s named executive officers that is based on or otherwise relates to the Business Combination (Proposal No. 3); and

 

4.

Adjournment Proposal—To consider and vote upon a proposal to approve, as an ordinary resolution, to adjourn the General Meeting to a later date or dates, if necessary, (a) to permit further solicitation and vote of proxies if there are insufficient votes for the approval of Proposal Nos. 1 through 3, (b) if there are insufficient Noble Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the General Meeting or (c) to allow reasonable time for the filing or mailing of any supplemental or amended disclosures that Noble has determined, based on the advice of outside legal counsel, is reasonably likely to be required under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by Noble shareholders prior to the General Meeting. The Adjournment Proposal (Proposal No. 4) will be presented to Noble shareholders only in the event that there are insufficient votes for the approval of the Business Combination Proposals, if there are insufficient Noble Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the General Meeting or to allow reasonable time for the filing or mailing of certain supplemental or amended disclosures.

Please see the sections entitled “Proposal No. 1The Business Combination Proposal”, “Proposal No. 2The NYSE Proposal”, “Proposal No. 3 — The Advisory Compensation Proposal”, and “Proposal No. 4The Adjournment Proposal.”

Voting Power; Record Date

Only holders of record at the close of business on April 8, 2022, the record date for the General Meeting, will be entitled to vote at the General Meeting. Each Noble shareholder is entitled to one vote for each Noble Share that such shareholder owned as of the close of business on the record date. If a Noble shareholder’s shares are held in “street name” or are in a margin or similar account, such shareholder should contact its broker, bank or other nominee to ensure that votes related to the shares beneficially owned by such shareholder are properly counted. On the record date, there were 63,071,744 Noble Shares outstanding.

Quorum and Required Vote for Proposals at the General Meeting

The approval of the Business Combination Proposal requires the affirmative vote of holders of at least two-thirds of Noble Shares present and voting in person or by proxy at a quorate General Meeting. Accordingly, a Noble shareholder’s failure to vote by proxy or to vote in person at the General Meeting will not be counted towards the number of Noble Shares required to validly establish a quorum, and if a valid quorum is otherwise established, such failure to vote will have no effect on the outcome of any vote on the Business Combination Proposal. Broker non-votes and abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the Business Combination Proposal.

 

12


Table of Contents

The approval of the NYSE Proposal, the Advisory Compensation Proposal and the Adjournment Proposal requires the affirmative vote of holders of at least a majority of Noble Shares present and voting in person or by proxy at a quorate General Meeting. Accordingly, a Noble shareholder’s failure to vote by proxy or to vote in person at the General Meeting will not be counted towards the number of Noble Shares required to validly establish a quorum, and if a valid quorum is otherwise established, such failure to vote will have no effect on the outcome of any vote on the NYSE Proposal, the Advisory Compensation Proposal or the Adjournment Proposal. Broker non-votes and abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the NYSE Proposal, the Advisory Compensation Proposal or the Adjournment Proposal.

For the purposes of the Business Combination Proposals, one or more shareholders who together hold a simple majority of the issued and outstanding Noble Shares entitled to vote at the General Meeting must be present, in person or represented by proxy, at the General Meeting to constitute a quorum and in order to conduct business at the General Meeting. As of the record date for the General Meeting, 31,535,873 Noble Shares would be required to achieve a quorum. Noble directors, executive officers and their affiliates hold approximately .35 % of the outstanding Noble Shares as of April 8, 2022.

The Closing is conditioned upon the approval of the Business Combination Proposal and the NYSE Proposal. Each of the NYSE Proposal and the Advisory Compensation Proposal is conditioned upon the approval of the Business Combination Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus and the exchange offer prospectus.

It is important for you to note that, in the event that the Business Combination Proposal and the NYSE Proposal do not receive the requisite vote for approval, Noble will not consummate the Business Combination.

Recommendation to Noble Shareholders

The Noble Board believes that each of the Business Combination Proposals and the Adjournment Proposal to be presented at the General Meeting is in the best interests of Noble and its shareholders and recommends that its shareholders vote “FOR” each of the proposals.

Interests of Noble’s Directors and Executive Officers in the Business Combination

In considering the recommendation of the Noble Board to vote in favor of the Business Combination, Noble shareholders should be aware that aside from their interests as shareholders, Noble’s current officers and directors have interests in the Business Combination that are different from, or in addition to, those of other Noble shareholders generally. The Noble Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination, and in recommending to Noble shareholders that they approve the Business Combination Proposal. Noble shareholders should take these interests into account in deciding whether to approve the Business Combination Proposal. These interests include the potential severance payments and benefits in connection with certain terminations of employment following the Business Combination to certain of Noble’s executive officers, the fact that Robert W. Eifler will serve as the President and Chief Executive Officer of Topco, Richard B. Barker, William E. Turcotte, Joey M. Kawaia and Blake A. Denton, each an executive officer of Noble, will serve as executive officers of Topco, Charles M. (Chuck) Sledge, the current Chairman of the Noble Board, will become chairman of the Topco Board, Alan J. Hirshberg and Ann D. Pickard, each a director on the Noble Board, will be designated to the Topco Board by Noble upon Closing and the fact that Noble RSU Awards held by Noble non-employee directors will vest as a result of the Business Combination.

Other than as described in the section entitled “The Business Combination Agreement and Ancillary Documents—Ancillary Documents—Relationship Agreement,” Topco is not aware of any material conflicts of interests related to the Business Combination with holders of Noble Shares.

 

13


Table of Contents

The following discussion sets forth certain of these interests in the Business Combination of each executive officer or non-employee director of Noble.

Treatment of Noble Outstanding Equity Awards for Noble’s Directors and Executive Officers

Each of Noble’s executive officers and directors hold unvested Noble RSU Awards under Noble’s equity compensation plans. At the Merger Effective Time, each Noble RSU Award that is outstanding will cease to represent a right to acquire Noble Shares (or value equivalent to Noble Shares) and will be exchanged for restricted share units representing the right to acquire, on the same terms and conditions as were applicable under the Noble RSU Award (including any vesting conditions), that number of Topco Shares equal to the number of Noble Shares subject to such Noble RSU Award immediately prior to the Merger Effective Time. None of the Noble RSU Awards held by Noble executive officers will vest solely as a result of the Business Combination. Following the Merger Effective Time, the exchanged Noble RSU Awards will be subject to the same terms and conditions (including time-based and termination related vesting conditions) that were applicable to such Noble RSU Awards under the Noble stock plan and award agreement immediately prior to the Merger Effective Time except as set forth in the following paragraph.

For Noble’s executive officers, exchanged Noble RSU Awards that are subject to performance-based vesting conditions will remain subject to such performance vesting conditions following the Business Combination. However, if the officer’s employment is terminated by Noble without “cause” or by the executive with “good reason” (as such terms are defined in the executives’ employment agreements and further described below under “Employment Agreements for Noble’s Directors and Executive Officers” upon or within 12 months following the Business Combination, the Noble RSU Awards will vest based on (i) for any performance period that has lapsed or performance metric that has been determined, the actual level of performance achieved (or in the case of Mr. Eifler, the greater of actual performance and target performance) and (ii) for all other performance periods or metrics, the target level of performance. The termination provisions associated with exchanged Noble RSU Awards held by Noble’s executive officers that are subject only to time-based vesting conditions are not affected by the Business Combination, but, based on provisions that apply on termination regardless of whether or not the Business Combination occurs, will become fully vested upon a termination of the officer’s employment at any time (i) by reason of the officer’s death, disability or “retirement” (defined as any termination other than due to death, disability or by Noble for “cause” after the executive has attained age 55 and the sum of the executive’s age and years of service with Noble or a predecessor exceeds 65), (ii) by Noble without “cause” or (iii) by the executive officer with “good reason” (as such terms are defined in the executives’ employment agreement and further described below under “Employment Agreements for Noble’s Directors and Executive Officers”).

Noble RSU Awards held by Noble’s non-employee directors will become vested in full as of the Merger Effective Time (to the extent not already vested at such time in accordance with the award’s original vesting schedule).

Interests of Maersk Drilling’s Directors and Executive Officers in the Business Combination

In addition to the interests of Noble’s officers and directors, Noble shareholders should take the interests of Maersk Drilling’s directors and executive officers into account in deciding whether to approve the Business Combination Proposal. Their interests in the Business Combination are different from, or in addition to, those of Noble’s shareholders generally.

Such interests include the fact that the chairman of Maersk Drilling, Claus V. Hemmingsen, who will be one of the three directors designated to the Topco Board by Maersk Drilling upon Closing is a board member in APMH, Den A.P. Møllerske Støttefond and A.P. Møller og Hustru Chastine Mc-Kinney Møllers Fond til Almene

 

14


Table of Contents

Formaal (The A.P. Moller Foundation). Kristin H. Holth and Alastair Maxwell, each a director on the Maersk Drilling Board, will be designated to the Topco Board by Maersk Drilling upon Closing. The Vice Chairman of Maersk Drilling, Robert M. Uggla is Chief Executive Officer of APMH, the chairman of the board of directors of APMH Invest and a member of the board of A.P. Møller—Maersk A/S. In addition, Robert M. Uggla may from time to time receive distributions from A.P. Møller og Hustru Chastine Mc-Kinney Møllers Familiefond based on the foundation charter due to his family ties to the founder of Maersk Drilling. A.P. Møller og Hustru Chastine Mc-Kinney Møllers Familiefond holds 8.9% of the share capital and votes in Maersk Drilling. A member of the Maersk Drilling Board, Martin N. Larsen is Chief Financial Officer of APMH and a board member and Chief Executive Officer of APMH Invest. APMH Invest owns approximately 41.6% of the Maersk Drilling Shares.

Executive officers of Maersk Drilling hold long-term equity incentive awards in the form of Maersk Drilling RSU Awards under the Maersk Drilling RSU Long-Term Incentive Programme for Executive Management 2019 and the Maersk Drilling RSU Long-Term Incentive Programme 2019 (together the “Maersk Drilling LTI”). The grant of Maersk Drilling RSU Awards under the Maersk Drilling LTI are made free of charge for each participant on a revolving basis and do not depend on the achievement of specific goals. It is a requirement for participation in the Maersk Drilling LTI, and any grant thereunder that the participant in question is employed with Maersk Drilling Group on the date of the grant and that such employment is not under termination. Maersk Drilling RSU Awards have a total vesting period of three years beginning on the date of the grant, subject to the participant’s continued employment with the Maersk Drilling Group at the time of the expiry of the vesting period and that such employment is not under termination. None of the Maersk Drilling RSU Awards issued under the Maersk Drilling LTI will vest solely as a result of the Business Combination.

The executive officers and certain other employees of Maersk Drilling are, subject to certain conditions, eligible to receive a cash-based bonus to be paid in a single lump sum following completion of the Business Combination. Subject to applicable law, the right to this bonus will lapse in the event the employer serves notice to terminate the employee’s employment prior to the time of payment and the employee has provided reasonable cause for such termination or the employee serves notice to terminate the employment prior to the time of payment without such termination being due to material breach on the part of the employer.

The executive officers and certain other employees of Maersk Drilling are party to agreements that would provide for enhanced severance protections in the event of termination of employment following the Business Combination.

For additional information, see the section entitled “The Business Combination—Interests of Maersk Drilling’s Directors and Executive Officers in the Business Combination”.

Certain Information Relating to Topco

Listing of Topco Shares on NYSE and Nasdaq Copenhagen and Delisting of Noble Shares and Deregistration of Noble

Topco intends to list the Topco Shares on the NYSE under the symbol “NE” upon the Closing. Topco intends to list the Topco Shares on Nasdaq Copenhagen under a ticker symbol to be determined prior to Closing. Noble and Maersk Drilling cannot assure you that the Topco Shares will be approved for listing on NYSE or Nasdaq Copenhagen. Additionally, Noble anticipates that, following consummation of the Business Combination, the Noble Shares will be delisted from NYSE, and Noble will be deregistered under the Exchange Act.

Comparison of Shareholder Rights

Until consummation of the Business Combination, Cayman Islands law and the Noble Articles will continue to govern the rights of Noble shareholders. From the Closing, English law and the Topco Articles of Association will govern the rights of Topco shareholders.

 

15


Table of Contents

There are certain differences, on the one hand, in the rights of Noble shareholders and/or Maersk Drilling shareholders prior to the Business Combination and, on the other hand, the rights of Topco shareholders after the Business Combination. Please see the section entitled “Comparison of Shareholder Rights.”

Material Tax Considerations

Kirkland & Ellis LLP rendered to Noble its opinion to the effect that, based upon and subject to the assumptions, exceptions, limitations and qualifications set forth herein and in the tax opinion filed as an exhibit to the registration statement of which this proxy statement/prospectus forms a part, and the representations from Noble, Topco and Merger Sub, the Merger will qualify as a “reorganization” under Section 368(a) of the Code. Assuming the Merger qualifies as a “reorganization” under Section 368(a) of the Code, U.S. Holders generally will not recognize gain or loss for U.S. federal income tax purposes on the receipt of Topco Shares for Noble Shares in connection with the Merger.

All Holders of Noble Shares should read carefully the information included under “Material Tax Considerations” for a summary of material U.S. federal income tax consequences of the Merger and the ownership and disposition of Topco Shares after the Business Combination for U.S. Holders and a summary of certain material U.K. tax considerations in relation to the Merger and the ownership and disposition of Topco Shares after the Business Combination for Non-UK Shareholders (as defined in the section entitled “Material Tax Considerations—Material U.K. Tax Considerations” below). Holders of Noble Shares are urged to consult their tax advisors to determine the tax consequences to them (including the application and effect of any state, local or other income and other tax laws) of the Business Combination, including the U.S. federal income tax consequences and the Cayman Islands, United Kingdom and Danish tax consequences of the acquisition, holding, redemption and disposal of Topco Shares.

Regulatory Approvals

Antitrust Considerations

To complete the Business Combination pursuant to the terms of the Business Combination Agreement, Noble and Maersk Drilling must make filings with and obtain authorizations, approvals or consents from a number of antitrust regulatory authorities, including the United Kingdom Competition and Markets Authority (the “UK CMA”) and the Norwegian Competition Authority (Konkurransetilsynet or “NCA”). The parties have also agreed, among other things, to (i) file (in draft form where applicable) as promptly as practicable any required filings and/or notifications under applicable antitrust laws or under foreign direct investment laws, with respect to the transactions contemplated by the Business Combination Agreement, including using all reasonable endeavors to submit a merger notice (meldung) to the NCA pursuant to §18 and compliant with §18a of the Competition Act (Konkurranseloven) (Norway) by no later than January 14, 2022 and to submit a merger notice that complies with section 96(2) of the Enterprise Act 2002 (UK) to the UK CMA by no later than February 11, 2022, and use all reasonable endeavors to cause the expiration or termination of any applicable waiting periods and to obtain all necessary approvals or clearances (including clearance from the UK CMA) under any antitrust law or under foreign direct investment laws, and (ii) take, or cause to be taken, all other actions and do, or cause to be done, all other things necessary, proper or advisable to consummate and make effective the transactions contemplated by the Business Combination Agreement, and to avoid or eliminate each and every impediment under any law that may be asserted by any governmental entity with respect to the transactions contemplated by the Business Combination Agreement so as to enable the Closing to occur as soon as reasonably possible (and in any event no later than the End Date).

In accordance with the Business Combination Agreement, the parties have submitted the applicable merger notices to the relevant governmental authorities, including the NCA and the UK CMA. On January 12, 2022, the

 

16


Table of Contents

NCA provided unconditional approval to the Business Combination. The Business Combination has also received approval in Brazil and in the Republic of Trinidad and Tobago. The process for obtaining the other approvals, including from the UK CMA, is ongoing. In order to obtain the necessary approvals, Noble may be required to offer a remedy to the relevant governmental authorities, including the UK CMA, which may entail limitations or costs on, or require divestitures to, Noble and / or Maersk Drilling’s business, as a condition to the completion of the Business Combination. Please see “Risk Factors —Risks Relating to the Business Combination —The Business Combination is conditioned on the receipt of certain required approvals and governmental and regulatory consents, which, if delayed, not granted or granted with unfavorable conditions, may delay or jeopardize the completion of the Business Combination, result in additional expenditures of money and resources and/or reduce the anticipated benefits of the Business Combination.

Foreign Investment Screening Considerations

To complete the Business Combination pursuant to the terms of the Business Combination Agreement, Noble and Maersk Drilling must also make filings with and obtain authorizations, approvals or consents pursuant to the UK National Security and Investment Act 2021, and the Danish Act on Screening of Certain Foreign Direct Investments (Act no. 842 of 10 May 2021). On January 26, 2022, the Danish Business Authority’s (DBA) determined that the Business Combination does not require prior authorization under the Danish Act on Screening of Certain Foreign Direct Investments (Act no. 842 of 10 May 2021) or associated regulations. On March 2, 2022, the Secretary of State of the United Kingdom determined that it would not take any action in relation to the Business Combination in accordance with section 14 of the National Security and Investment Act 2021. No other approvals relating to foreign direct investment are required.

Approvals Required to Make the Offer

The Offer will be subject to pre-approval by the DFSA of the Offering Circular and the Offer Document.

Listing Approvals

In addition, the Topco Shares to be issued in the Business Combination must be approved for listing on the NYSE and admission to trading and official listing on Nasdaq Copenhagen, subject to official notice of issuance.

Treatment of Indebtedness

As of December 31, 2021, the Maersk Drilling Group had total outstanding interest-bearing debt with a carrying amount of $1.05 billion, comprising $766 million outstanding under the Syndicated Facilities Agreement and $284 million outstanding under the DSF Facility Agreement.

In relation to the Offer, Maersk Drilling has secured (on a bilateral basis) the agreement of each of the Syndicated Facilities Lenders to, inter alia (a) waive their rights in respect of the Syndicated Facilities CoC Trigger (including with respect to not requesting any cancellation and/or prepayment of commitments and outstanding loans), and (b) not to exercise or fail to exercise any right available to them under the Syndicated Facilities Agreement where such action or inaction could otherwise directly or indirectly have the effect of preventing or postponing the Business Combination or its timely implementation or consummation (each such agreement a “Syndicated Facilities Consent Letter”). Pursuant to each Syndicated Facilities Consent Letter, Maersk Drilling has agreed, in connection with the finalization of an amendment to the Syndicated Facilities Agreement the form of which is yet to be agreed, (i) to pay each consenting Syndicated Facilities Lender an amendment fee, and (ii) to include in the amendment agreement a step-up in the margin for each Syndicated Facility, which will gradually increase 12 months, 9 months and 6 months before the termination date of each Syndicated Facility. The agreements of the relevant Syndicated Facilities Lenders under each Syndicated Facilities Consent Letter are conditional on and subject to provision by Topco of a guarantee with respect to the payment obligations of the obligors under the

 

17


Table of Contents

Syndicated Facilities Agreement and the related finance documents, substantially in the form provided by the existing guarantors under the Syndicated Facilities Agreement. The Syndicated Facilities Lenders may also need to clear additional “know your customer” checks in relation to the Business Combination.

By way of a waiver and amendment letter agreed in October 2021 between Maersk Drilling and Danmarks Skibskredit A/S as lender and security agent under the DSF Facility Agreement regarding the Offer, Danmarks Skibskredit A/S has agreed, inter alia, not to exercise any rights in respect of the DSF Facility CoC Trigger (including with respect to not requesting any cancellation and/or prepayment of commitments and outstanding utilizations) under the DSF Facility Agreement, as such rights may arise pursuant to or as a result of the Offer or pursuant to its implementation or consummation. Danmarks Skibskredit A/S’ undertaking is subject to the condition that Topco shall no later than the date of completion of the Offer provide a unilateral guarantee with respect to the payment obligations of the obligors under the DSF Facility Agreement for the benefit of lenders under the DSF Facility Agreement, in form and substance equivalent to the guarantee granted by the other guarantors under the DSF Facility Agreement.

For additional information, see the section entitled “Business of Maersk Drilling and Certain Information About Maersk DrillingLiabilities and Indebtedness”.

As of December 31, 2021, Noble had no loans outstanding and $8.8 million of letters of credit issued under that certain Revolving Credit Agreement, dated February 5, 2021, among Noble Finance Company, Noble International Finance Company and the lenders party thereto and an additional $6.3 million in letters of credit and surety bonds issued under bilateral arrangements and $216.0 million of 11% senior secured second lien notes due 2028. No amendments or consents to the revolving credit agreement or the indenture governing such senior notes are required in connection with the Business Combination.

For a description of Noble’s existing indebtedness, see Noble’s Annual Report on Form 10-K for the year ended December 31, 2021 and other documents incorporated by reference into this proxy statement/prospectus and the exchange offer prospectus.

Accounting Treatment of the Business Combination

The Business Combination will be accounted for as a business combination under ASC 805. Under this method of accounting, Maersk Drilling will be treated as the “acquired” company for financial reporting purposes. ASC 805 requires, among other things, that the assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date. Any consideration transferred or paid in a business combination in excess of the fair value of the assets acquired and liabilities assumed should be recognized as goodwill. The net assets of Noble will remain stated at historical cost.

Noble has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

 

   

Noble shareholders are expected to hold a majority interest in the combined company after the Business Combination is completed;

 

   

the Topco Board will be comprised of seven members, including three individuals designated by Noble, three individuals designated by Maersk Drilling, and Robert W. Eifler, current President and Chief Executive Officer of Noble, who will serve as the President and Chief Executive Officer of the combined company. Of the three individuals designated by Noble, up to two individuals may be designated by the Investor Manager (depending upon the Investor Manager’s percentage ownership of outstanding Topco Shares). Of the three individuals designated by Maersk Drilling, up to two

 

18


Table of Contents
 

individuals may be designated by APMH Invest (depending upon the APMH Invest percentage ownership of outstanding Topco Shares); and

 

   

the combined company name, ticker symbol, and headquarters will remain consistent with that of Noble.

Based on Noble shareholders’ majority equity stake in the combined company, the composition of the board of directors of the combined company, and the other factors noted herein, Noble is expected to be the accounting acquirer of Maersk Drilling in accordance with the guidance of ASC 805.

Appraisal or Dissent Rights

Appraisal or dissent rights are not available to holders of Noble Shares or Maersk Drilling Shares in connection with the Business Combination.

Proxy Solicitation

Proxies may be solicited by mail, via telephone or via e-mail or other electronic correspondence. Noble has engaged Innisfree M&A Incorporated to assist in the solicitation of proxies.

If a Noble shareholder grants a proxy, such shareholder may still vote its shares in person if it revokes its proxy before the General Meeting. A Noble shareholder may also change its vote by submitting a later-dated proxy, as described in the section entitled “General Meeting of Noble ShareholdersRevoking Your Proxy.”

Litigation Relating to the Business Combination

On January 13 and January 18, 2022, purported shareholders of Noble filed complaints in the Southern District of New York alleging that disclosures contained within the registration statement of which this proxy statement/prospectus forms a part are incomplete. The complaints are both brought individually and are captioned: Le v. Noble Corp. et al., Case No. 1:22-cv-00351 (S.D.N.Y.) and Marini v. Noble Corp. et al., Case No. 1:22-cv-00442 (S.D.N.Y.). The plaintiffs seek various remedies, including, among other things, injunctive relief to prevent the consummation of the Business Combination, unless certain allegedly material information is disclosed. On January 26, 2022, Noble received a letter on behalf of another purported shareholder making similar allegations and demands. Noble anticipates that it will receive additional letters and/or complaints making similar allegations. Noble believes these allegations are without merit and that no further disclosure is required by applicable rule, statute, regulation or law beyond that already contained in the registration statement.

Risk Factor Summary

In evaluating the Business Combination and the proposals to be considered and voted on at the General Meeting, you should carefully review and consider the matters addressed under the heading “Cautionary Note Regarding Forward-Looking Statements” and the risk factors set forth and incorporated by reference under “Risk Factors”, a summary of which is set forth below:

 

   

The Business Combination may not be as successful as anticipated, and the combined company may not achieve the intended benefits or do so within the intended timeframe and the integration costs may exceed estimates.

 

   

Noble must obtain required approvals and governmental and regulatory consents to consummate the Business Combination, which, if delayed, not granted or granted with unfavorable conditions (including the potential divestiture of certain assets), may delay or jeopardize the completion of the Business Combination, result in additional expenditures of money and resources and/or reduce the anticipated benefits of the Business Combination.

 

 

19


Table of Contents
   

Each of Noble and Maersk Drilling may waive one or more of the conditions to the Business Combination without shareholder approval.

 

   

Because the Exchange Ratios are fixed, the market value of the Topco Shares received by Noble shareholders or Maersk Drilling shareholders as part of the Business Combination may be less than the market value of the Noble Shares or Maersk Drilling Shares that such holder held prior to the completion of the Business Combination.

 

   

Noble shareholders and Maersk Drilling Shareholders will have a reduced ownership and voting interest after the Business Combination and may exercise less influence over management in Topco than they currently have in Noble or Maersk Drilling, as applicable.

 

   

Noble shareholders and Maersk Drilling Shareholders are not entitled to appraisal or dissent rights in connection with the Business Combination or in the Offer.

 

   

Failure to consummate the Business Combination could negatively impact the share price and the future business and financial results of Noble and/or Maersk Drilling.

 

   

Topco’s actual financial position and results of operations may differ materially from the unaudited pro forma financial information included in this proxy statement/prospectus and the exchange offer prospectus.

 

   

Changes to U.S., U.K., Cayman and other non-U.S. tax laws could adversely affect Topco.

 

   

English law requires that companies meet certain additional financial requirements before they can declare dividends or repurchase shares and such requirements may affect Topco’s ability to declare dividends or repurchase shares following the Business Combination.

 

   

The rights of holders of Topco Shares to be received by Noble shareholders in connection with the Business Combination will be different from the rights of holders of Noble Shares due to the difference between Cayman and English law.

 

   

Topco may not be able to retain customers or suppliers, and customers or suppliers may seek to modify contractual obligations with Topco, either of which could have an adverse effect on Topco’s business and operations. Third parties may terminate or alter existing contracts or relationships with Topco as a result of the Business Combination.

 

   

Risks relating to Noble’s business, including risks relating to the competitiveness and cyclical business in the offshore contract drilling industry; the ability to renew or replace existing contracts; risks relating to operations in international locations; risks relating to supplier capacity constraints or shortages in parts or equipment or price increases; substantial dependence on several specific customers; changes in, compliance with, or failure to comply with certain laws and regulations; and risks relating to compliance with laws and regulations relating to the protection of the environment and human health and safety.

 

   

Risks relating to the Maersk Drilling Group’s business, including risks relating to reliance on third-party subcontractors and suppliers; operating hazards and the risk of accident or breakdown; commercial and contracting risks; risks relating to environmental conditions and poor physical infrastructure and logistics systems in some of the areas where the Maersk Drilling Group operates; labor interruptions or the loss of key personnel and labor costs; risks relating to the market value of its drilling rigs and equipment, including upgrade, refurbishment and repair programs, mobilization between geographic areas, and reactivation of stacked rigs; customer concentrations; and credit risks associated with its key customers and certain other third parties.

 

   

Both Noble and the Maersk Drilling Group are affected by financing risk due to their respective operations in a capital-intensive industry, where future sources of financing are not necessarily secured.

 

20


Table of Contents
   

In addition, each of Noble and the Maersk Drilling Group are subject to risks relating to the regulatory environment and complex laws and regulations in various jurisdictions, including international government regulations as well as increasingly stringent environmental laws.

 

   

Both Noble and the Maersk Drilling Group are subject to anti-corruption laws in the jurisdictions in which they operate, as well as trade compliance and economic sanctions laws and regulations. A failure to comply with these laws and regulations may subject the companies to civil and criminal penalties, harm their reputation and materially adversely impact their respective businesses or results of operations.

 

21


Table of Contents

Comparative Per Share Market Price

The following table sets forth the closing sale price per Noble Share and Maersk Drilling Share as reported on the NYSE and Nasdaq Copenhagen, respectively, as of November 9, 2021, the last trading day before the public announcement of the Business Combination, and as of April 8, 2022, the most recent practicable trading day prior to the date of this document.

 

     Noble
Closing Price
     Maersk
Drilling
Closing Price
 

November 9, 2021

   $ 28.57      $ 35.97  

April 8, 2022

   $ 34.47      $ 53.75  

Noble shareholders and Maersk Drilling shareholders are encouraged to obtain current market quotations for Noble Shares and Maersk Drilling Shares and to review carefully the other information contained in, attached to or incorporated by reference into this proxy statement/prospectus and the exchange offer prospectus. For additional information, see the sections entitled “Additional Information” and “Where You can Find More Information.”

 

22


Table of Contents

SUMMARY HISTORICAL FINANCIAL DATA OF NOBLE

The following table sets forth summary selected historical consolidated financial information for Noble as of the end of and for the periods indicated. The statement of income (loss) and cash flows data for each of the years ended December 31, 2021, 2020 and 2019, and the balance sheet data as of December 31, 2021 and 2020, are derived from Noble’s audited consolidated financial statements for such years, which are incorporated by reference into this proxy statement/prospectus and the exchange offer prospectus.

Upon emergence from bankruptcy proceedings on February 5, 2021, Noble applied fresh start accounting in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 852 — Reorganizations. The application of fresh start accounting resulted in a new basis of accounting and Noble becoming a new entity for financial reporting purposes. Accordingly, Noble’s financial statements and notes after February 5, 2021 are not comparable to its financial statements and notes on and prior to that date. The operating results for the period from February 6, 2021 through December 31, 2021 are not necessarily indicative of the results of operations for any future period.

The information set forth below is a summary that should be read together with the consolidated financial statements of Noble and the related notes thereto. The following summary selected historical consolidated financial information is qualified in its entirety by reference to such documents and all of the financial information and notes contained in those documents. See “Where You Can Find More Information” for instructions on how to obtain these documents.

 

     Successor      Predecessor  
(In thousands, except per share amounts)    Period from
February 6,
2021 through
December 31,
2021
     Period From
January 1,
2021 through
February 5,
2021
             
  Year Ended December 31  
  2020     2019  

Consolidated Statement of Income Data

           

Operating revenues

   $ 770,325      $ 77,481     $ 964,272     $ 1,305,438  

Operating costs and expenses1

     709,493        76,051       5,040,817       1,971,711  

Operating income (loss)

     60,832        1,430       (4,076,545     (666,273

Other income (expense)

     41,515        252,221       (162,317     (242,812
  

 

 

    

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations become income taxes

     102,347        253,651       (4,238,862     (909,085

Income tax (provision) benefit

     (365      (3,423     260,403       38,540  
  

 

 

    

 

 

   

 

 

   

 

 

 

Net income (loss) from continuing operations

     101,982        250,228       (3,978,459     (870,545
  

 

 

    

 

 

   

 

 

   

 

 

 

Net income (loss) from discontinued operations, net of tax

                        (3,821)  
  

 

 

    

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 101,982      $ 250,228     $ (3,978,459   $ (874,366

Net income attributable to noncontrolling interests

                        173,776  
  

 

 

    

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Noble Corporation

   $ 101,982      $ 250,228     $ (3,978,459   $ (700,590
  

 

 

    

 

 

   

 

 

   

 

 

 

 

23


Table of Contents
     Successor      Predecessor  
(In thousands, except per share amounts)    Period from
February 6,
2021 through
December 31,
2021
     Period From
January 1,
2021 through
February 5,
2021
             
  Year Ended December 31  
  2020     2019  

Per share data—Basic:

           

Income (loss) from continuing operations

   $ 1.61      $ 1.00     $ (15.86   $ (2.79

Income (loss) from discontinued operations

                        (0.02
  

 

 

    

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Noble Corporation

   $ 1.61      $ 1.00     $ (15.86   $ (2.81
  

 

 

    

 

 

   

 

 

   

 

 

 

Per share data—Diluted:

           

Income (loss) from continuing operations

   $ 1.51      $ 0.98     $ (15.86   $ (2.79

Income (loss) from discontinued operations

                        (0.02
  

 

 

    

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Noble Corporation

   $ 1.51      $ 0.98     $ (15.86   $ (2.81
  

 

 

    

 

 

   

 

 

   

 

 

 

Cash Flows Data

           

Net cash provided by (used in) operating activities

   $ 51,616      $ (45,448   $ 273,197     $ 186,771  

Net cash used in investing activities

   $ 207,883      $ (14,435   $ (121,520   $ (256,030

Net cash provided by (used in) financing activities

   $ (176,770    $ (191,165   $ 107,440     $ (200,724
 
Balance Sheet Data (at end of period)    December 31,
2021
           December, 31,
2020
       

Total assets

   $ 2,073,442        $ 4,263,937    

Total liabilities

   $ 572,815        $ 4,575,325    

Total equity

   $ 1,500,627        $ (311,388  

 

1 

Results for the years ended 2021, 2020 and 2019 include impairment charges of zero, $3.9 billion and $615.3 million, respectively.

 

24


Table of Contents

SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF

MAERSK DRILLING

The following tables set forth selected consolidated income statement data and cash flow financial data for the fiscal years ended December 31, 2021, 2020 and 2019 and financial position data as of December 31, 2021, 2020 and 2019 derived from Maersk Drilling’s consolidated financial statements which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). You should read the following selected consolidated financial data in conjunction with Maersk Drilling’s consolidated financial statements and the information included in the section of this proxy statement/ prospectus titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Maersk Drilling.”

The following table presents Maersk Drilling’s summary consolidated income statement data for the years ended December 31, 2021, 2020 and 2019:

 

     As of December 31,  
     2021     2020     2019  
     USD million  

Summary Income Statement Data:

      

Revenue

     1,267       1,096       1,222  

Cost of sales (exclusive of depreciation and amortization shown separately below)

     (921     (807     (807

Special items

     (21     (42     (16

Depreciation and amortization

     (213     (286     (387

Impairment losses/reversals

     11       (1,580     (34

Gain/loss on sale of non-current assets

     256       (2     8  

Share of results in joint ventures

     (1     (1     (2
  

 

 

   

 

 

   

 

 

 

Profit/loss before financial items

     378       (1,622     (16

Financial income

     14       15       26  

Financial expenses

     (75     (87     (94
  

 

 

   

 

 

   

 

 

 

Profit/loss before tax

     317       (1,694     (84

Tax

     (26     41       (29
  

 

 

   

 

 

   

 

 

 

Profit/loss for the year

     291       (1,653     (113
  

 

 

   

 

 

   

 

 

 

Earnings in USD per share of DKK 10 for the year

     7.0       (39.9     (2.7

Diluted earnings in USD per share of DKK 10 for the year

     7.0       (39.9     (2.7

 

25


Table of Contents

The following table presents Maersk Drilling’s summary consolidated balance sheet data as of December 31, 2021, 2020 and 2019:

 

     As of December 31,  
     2021      2020      2019  
     USD million  

Summary Consolidated Balance Sheet Data:

        

Total non-current assets

     2,873        3,117        4,801  

Total current assets

     909        602        716  
  

 

 

    

 

 

    

 

 

 

Total assets

     3,782        3,719        5,517  
  

 

 

    

 

 

    

 

 

 

Share capital

     63        63        63  

Reserves and retained earnings

     2,257        1,954        3,617  
  

 

 

    

 

 

    

 

 

 

Total equity

     2,320        2,017        3,680  
  

 

 

    

 

 

    

 

 

 

Borrowings, non-current

     926        1,149        1,273  

Other non-current liabilities

     52        50        71  
  

 

 

    

 

 

    

 

 

 

Total non-current liabilities

     978        1,199        1,344  
  

 

 

    

 

 

    

 

 

 

Borrowings, current

     136        136        136  

Other current liabilities

     348        367        357  
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     484        503        493  
  

 

 

    

 

 

    

 

 

 

Total liabilities

     1,462        1,702        1,837  
  

 

 

    

 

 

    

 

 

 

Total equity and liabilities

     3,782        3,719        5,517  
  

 

 

    

 

 

    

 

 

 

The following table presents Maersk Drilling’s summary consolidated cash flow data for the years ended December 31, 2021, 2020 and 2019:

 

     Year ended December 31,  
         2021             2020             2019      
     USD million  

Summary Consolidated Cash Flow Data:

      

Cash flow from operating activities

     315       267       420  

Cash flow from/used for investing activities

     301       (150     (303

Cash flow used for financing activities

     (283     (204     (180
  

 

 

   

 

 

   

 

 

 

Net cash flow for the period

     333       (87     (63
  

 

 

   

 

 

   

 

 

 

Cash and bank balances January 1

     226       310       372  

Currency translation effect on cash and bank balances

     (2     3       1  
  

 

 

   

 

 

   

 

 

 

Cash and bank balances at end of the period

     557       226       310  
  

 

 

   

 

 

   

 

 

 

 

26


Table of Contents

SUMMARY UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL INFORMATION

The following tables set forth summary selected unaudited pro forma condensed combined financial information, or the summary pro forma financial information, presented to illustrate the estimated effects of the Business Combination (including certain accounting adjustments, which were prepared in accordance with U.S. GAAP using the acquisition method of accounting with Noble designated as the accounting acquirer of Maersk Drilling), Noble’s emergence from bankruptcy, Noble’s Pacific Drilling Merger (as defined below), and certain sales of rigs. Please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.”

The summary pro forma financial information is presented for illustrative purposes only, incorporates certain assessments and judgments made solely by Noble and is not necessarily indicative of the operating results or financial position that would have occurred if the Business Combination had been completed as of the beginning of the period presented, nor is it necessarily indicative of the future operating results or financial position of the combined business of Noble and Maersk Drilling. In addition, the summary pro forma financial information includes adjustments which are preliminary and may be revised. There can be no assurance that such revisions will not result in material changes to the information presented. The summary selected unaudited pro forma condensed combined balance sheet data combines the consolidated balance sheets of Noble and Maersk Drilling as of December 31, 2021 and gives effect to the proposed Business Combination as if it had occurred on December 31, 2021. The summary selected unaudited pro forma condensed combined statements of operations data combines the historical results of Noble and Maersk Drilling for the year ended December 31, 2021 and gives effect to the proposed Business Combination as if it had occurred on January 1, 2021. The summary pro forma financial information has been derived from and should be read in conjunction with the financial statements and the related notes of both Noble and Maersk Drilling incorporated by reference into this proxy statement/prospectus and the exchange offer prospectus or included herein and the more detailed unaudited pro forma condensed combined financial information, including the notes thereto.

Summary Unaudited Pro Forma Condensed Combined Balance Sheet Data

 

(In thousands)    As of
December 31,
2021
 

Total Assets

   $ 5,757,220  

Total Liabilities

   $ 2,234,615  

Total Stockholders’ Equity

   $ 3,522,605  

Summary Unaudited Pro Forma Condensed Combined Statement of Operations Data

 

(In thousands, except per share amounts)    Year Ended
December 31,
2021
 

Operating revenues

   $ 2,040,127  

Operating income (loss)

   $ 393,161  

Net income

   $ 352,474  

Net per share, Basic

   $ 2.64  

Net per share, Diluted

   $ 2.55  

 

     Year Ended December 31, 2021  
     Assuming the following percentages of
Maersk Drilling Shares are acquired 1
 
     100%      90%      70%  

Net income attributable to Topco

     352,474        319,552        253,707  

Net income per share attributable to Topco, basic

     2.64        2.52        2.24  

Net income per share attributable to Topco, diluted

     2.55        2.43        2.15  

 

1 

For more information, see “Note 2. Business Combination with Maersk Drilling and Estimated Purchase Consideration—Minimum Acceptance Condition” in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.

 

27


Table of Contents

RISK FACTORS

In addition to the other information contained or incorporated by reference into this proxy statement/prospectus and the exchange offer prospectus, including the matters addressed in “Cautionary Statement Regarding Forward-Looking Statements”, you should carefully consider the following risk factors in determining whether to vote for the adoption of the Business Combination or approval of the issuance of Topco Shares. You also should read and consider the risk factors associated with the business of Noble because these risk factors may affect the operations and financial results of the combined company. These risk factors may be found under Part I, Item 1A, “Risk Factors” in Noble’s Annual Report on Form 10-K for the year ended December 31, 2021, and future filings with the SEC, each of which is on file or will be filed with the SEC and all of which are incorporated by reference into this proxy statement/prospectus and the exchange offer prospectus.

Risks Relating to the Business Combination

The Business Combination may not be as successful as anticipated, and the combined company may not achieve the intended benefits or do so within the intended timeframe and the integration costs may exceed estimates.

The Business Combination involves numerous operational, strategic, financial, accounting, legal, tax and other risks, including potential liabilities associated with the integrated businesses. Difficulties in integrating the business practices and operations of Noble and Maersk Drilling may result in the combined company performing differently than expected, in operational challenges or in the delay or failure to realize anticipated expense-related efficiencies, and could have an adverse effect on the financial condition, results of operations or cash flows of Noble and Maersk Drilling. Potential difficulties that may be encountered in the integration process include, among other factors:

 

   

the inability to successfully integrate the businesses of Noble and Maersk Drilling, operationally and culturally, in a manner that permits the combined company to achieve the cost savings anticipated from the Business Combination;

 

   

complexities, including demands on management, associated with managing a larger, more complex, integrated business;

 

   

difficulties in integrating Maersk Drilling’s and Noble’s restrictive enterprise resource planning software;

 

   

attempts by third parties to terminate or alter their contracts with the combined company, including as a result of change of control provisions;

 

   

the inability to retain key employees and otherwise integrate personnel from the two companies;

 

   

potential unknown liabilities and unforeseen expenses associated with the Business Combination;

 

   

regulatory authorities, including competition authorities may impose requirements, limitations or costs on, or require divestitures or place restrictions on the conduct of, Topco’s business after the completion of the Business Combination;

 

   

difficulty or inability to comply with the covenants of the debt of the combined company;

 

   

difficulty or inability in refinancing existing indebtedness of Noble or Maersk Drilling as it comes due, including certain indebtedness of Maersk Drilling that will become current in the fourth quarter of 2022 and is due to mature in the fourth quarter of 2023;

 

   

integrating relationships with customers, vendors and business partners;

 

   

performance shortfalls, including operating, safety, or environmental performance at one or both of the companies as a result of the diversion of management’s and employees’ attention caused by completing the Business Combination and integrating Noble’s and Maersk Drilling’s operations into the combined company; and

 

28


Table of Contents
   

the disruption of, or the loss of momentum in, each company’s ongoing business or inconsistencies in standards, controls, procedures and policies.

Additionally, the success of the Business Combination will depend, in part, on the combined company’s ability to realize the anticipated benefits and cost savings from combining Noble’s and Maersk Drilling’s businesses. Although the parties expect to realize run-rate annual cost-synergies of $125 million within two years of Closing, Noble’s ability to realize such synergies may be affected by a number of factors, including, but not limited to, the use of more cash or other financial resources on integration and implementation activities than anticipated; unanticipated increases in expenses unrelated to the Business Combination, which may offset the expected cost savings and other synergies from the Business Combination; and Noble’s ability to eliminate duplicative back office overhead and redundant selling, general, and administrative functions. The anticipated benefits and cost savings of the Business Combination may not be realized fully or at all, may take longer to realize than expected or could have other adverse effects that neither Noble nor Maersk Drilling currently foresee. In addition, the anticipated benefits and cost savings of the Business Combination as well as the related integration costs are based on a number of estimates and assumptions that are inherently uncertain and subject to risks that could cause the actual results to differ materially from those contained in such cost estimates. Some of the assumptions that Noble and Maersk Drilling have made, such as the achievement of certain synergies, may not be realized within the anticipated timeframe, or at all.

If the combined company fails to realize the anticipated synergies or other benefits or recognize further synergies or benefits, or the estimated integration costs of the Business Combination are exceeded, the business rationale of the Business Combination could not be realized and the value of the shareholders’ investment into the combined company could decrease.

The Business Combination is conditioned on the receipt of certain required approvals and governmental and regulatory consents, which, if delayed, not granted or granted with unfavorable conditions, may delay or jeopardize the completion of the Business Combination, result in additional expenditures of money and resources and/or reduce the anticipated benefits of the Business Combination.

The completion of the Business Combination is generally conditioned on, among other things, clearance by antitrust and foreign direct investment authorities in the United Kingdom and Norway and Denmark, as well as certain other jurisdictions as agreed between the parties. The governmental agencies from which the parties seek certain of these approvals and consents have broad discretion in administering the governing regulations. Neither Noble nor Maersk Drilling can provide any assurance that all required approvals and consents will be obtained. Moreover, as a condition to the approvals, the governmental agencies may impose requirements, limitations or costs on, or require divestitures or place restrictions on the conduct of, Topco’s business after the completion of the Business Combination. These requirements, limitations, costs, divestitures or restrictions could jeopardize or delay the completion of the Business Combination or reduce the anticipated benefits of the Business Combination. Further, no assurance can be given as to the terms, conditions and timing of the approvals. If Noble and Maersk Drilling agree to any material requirements, limitations, costs, divestitures or restrictions in order to obtain any approvals required to consummate the Business Combination, these requirements, limitations, costs, divestitures or restrictions could adversely affect Noble’s ability to integrate Maersk Drilling’s operations with Noble’s operations and/or reduce the anticipated benefits of the Business Combination. This could have a material adverse effect on Topco’s business and results of operations. The Business Combination has received antitrust approvals from Norway, Brazil and the Republic of Trinidad & Tobago, while the process for approvals from other authorities, including the UK CMA, are ongoing. The Business Combination has also received approval from the Danish Business Authority and the Secretary of State of the United Kingdom with respect to regulations pertaining to foreign direct investment, and no other approvals relating to foreign direct investment are required.

The Business Combination remains subject to conditions that neither Noble nor Maersk Drilling can control.

The Business Combination is subject to conditions, including, among others, the adoption of the Business Combination Agreement by the affirmative vote of at least two-thirds of the votes cast at Noble’s shareholder

 

29


Table of Contents

meeting, the termination of waiting periods and the receipt of approvals or clearances under applicable antitrust laws and applicable foreign direct investment laws, the Business Combination occurring on or before the End Date; provided, however, that if all of the conditions to the Offer, other than the condition relating to antitrust approvals, have been satisfied or are capable of being satisfied at such time, the End Date will automatically be extended to November 10, 2022; further provided that if all of the conditions to the Offer, other than the condition relating to antitrust approvals, have been satisfied or are capable of being satisfied at such time, the End Date will automatically be extended to February 10, 2023, and authorization of the listing of the combined company’s shares on NYSE and Nasdaq Copenhagen. Noble’s obligation to consummate the Business Combination is also subject to the Minimum Acceptance Condition.

If the conditions to the Business Combination are not satisfied or waived, then the Business Combination may not be consummated. See the section of this proxy statement/prospectus and the exchange offer prospectus entitled “The Business Combination AgreementConditions to Closing of the Business Combination”.

Each of Noble and Maersk Drilling may waive one or more of the conditions to the Business Combination without shareholder approval.

Each of Noble and Maersk Drilling may determine to waive, in whole or in part, one or more of the conditions to its obligations to complete the Business Combination, to the extent permitted by applicable laws. Each of Noble and Maersk Drilling will evaluate the materiality of any such waiver and its effect on its shareholders in light of the facts and circumstances at the time to determine whether any amendment of this proxy statement/prospectus and the exchange offer prospectus and, in the case of Noble, any resolicitation of proxies is required or warranted. Each of Noble and Maersk Drilling may waive any of these conditions prior to the General Meeting, and if any such waiver is material, this proxy statement/prospectus and the exchange offer prospectus will be amended as necessary to reflect such waiver. If either of Noble and Maersk Drilling determines to waive any conditions after receiving shareholder approval at the General Meeting, it may have the discretion to complete the Business Combination without seeking further shareholder approval.

Because the Exchange Ratios are fixed, the market value of the Topco Shares received by Noble shareholders or Maersk Drilling shareholders as part of the Business Combination may be less than the market value of the Noble Shares or Maersk Drilling Shares that such holder held prior to the completion of the Business Combination.

Noble shareholders will receive one Topco Share for each of their Noble Shares in the Merger and Maersk Drilling shareholders who tender their Maersk Drilling Shares in the Offer will receive 1.6137 Topco Shares for each Maersk Drilling Share tendered and not withdrawn. These Exchange Ratios are fixed and will not vary even if the market price of Noble Shares or Maersk Drilling Shares varies. Upon completion of the Business Combination, and assuming that all outstanding Maersk Drilling Shares are exchanged for Topco Shares in the Offer, former Noble and Maersk Drilling shareholders will each own approximately 50% of the outstanding Topco Shares on a fully diluted basis, i.e., taking into consideration Topco Shares still to be issued, immediately after completion of the Business Combination. The market value of Noble Shares and Maersk Drilling Shares at the time of the completion of the Business Combination may vary significantly from the value on the date of the execution of the Business Combination Agreement, the date of this document, the date on which Noble Shares vote on the Merger, the date on which Maersk Drilling shareholders tender their shares in the Offer or the expiration of the Offer Period. Because the Exchange Ratios will not be adjusted to reflect any changes in the market price of the Noble Shares or Maersk Drilling Shares, the value of the consideration paid to the Noble shareholders in the Merger or to the Maersk Drilling shareholders who tender their shares in the Offer may be lower than the market value of their Noble Shares or Maersk Drilling Shares, respectively, on earlier dates.

Changes in share prices may result from a variety of factors that are beyond the control of Topco, Noble or Maersk Drilling, including their respective business, operations and prospects, market conditions, economic development, geopolitical events, regulatory considerations, governmental actions, legal proceedings and other

 

30


Table of Contents

developments. Market assessments of the benefits of the Business Combination and of the likelihood that the Business Combination will be completed, as well as general and industry-specific market and economic conditions, may also have an adverse effect on share prices.

In addition, it is possible that the Business Combination may not be completed until a significant period of time has passed after the General Meeting and the expiration of the Offer Period. As a result, the market values of the Noble Shares or Maersk Drilling Shares may vary significantly from the date of the General Meeting or the expiration of the Offer Period to the date of the completion of the Business Combination.

Investors are urged to obtain up-to-date prices for Noble Shares, which are admitted to trading and official listing on the NYSE under the symbol “NE” and Maersk Drilling Shares, which are listed on Nasdaq Copenhagen under the symbol “DRLCO” and securities code DK0061135753.

If Maersk Drilling shareholders do not tender their Maersk Drilling Shares in the Offer, Maersk Drilling shareholders may receive consideration in the Compulsory Purchase that is substantially different in form and/or value from the consideration that they would have received in the Offer.

If the Business Combination is consummated and Topco holds more than 90% of the outstanding Maersk Drilling Shares, Topco will initiate a squeeze-out of the minority shareholders of Maersk Drilling. The Compulsory Purchase would eliminate any minority shareholder interests in Maersk Drilling remaining after the settlement of the Offer. Due to the statutory legal framework applicable to the Compulsory Purchase, holders of Maersk Drilling Shares who do not exchange their shares in the Offer may receive a different (including a lower) amount or a different form of consideration than they would have received had they exchanged their Maersk Drilling Shares in the Offer. Furthermore, if the value of Topco Shares offered as compensation in the context of a Compulsory Purchase has declined after the completion of the Business Combination, there may be no obligation of Topco to pay Maersk Drilling shareholders who did not exchange their shares in the Offer the implied value of the offer consideration received by Maersk Drilling shareholders who exchanged their shares in the Offer.

Any failure by Topco to acquire more than 90% of the Maersk Drilling Shares could lead to Maersk Drilling not becoming a wholly-owned subsidiary of Topco, and might prevent the delisting of Maersk Drilling Shares from Nasdaq Copenhagen.

The Closing and the completion of the Offer is conditioned upon the satisfaction of the Minimum Acceptance Condition, unless waived by Topco in accordance with the terms of the Offer Document. Thus, at the completion of the Offer, Topco may own more than 80% (or, if lowered by Topco in its sole discretion, more than 70%) but 90% or less of the share capital and voting rights of Maersk Drilling. Pursuant to the Danish Companies Act, Topco must own more than 90% of the share capital and voting rights of Maersk Drilling to implement a compulsory purchase of the remaining outstanding Maersk Drilling Shares (Maersk Drilling Shares held in treasury being excluded for the purpose of the calculation).

Whilst Topco may be able to exercise a Compulsory Purchase if it subsequently acquires more than 90% of the outstanding Maersk Drilling Shares and voting rights (excluding shares held in treasury), for instance where it acquires further Maersk Drilling Shares or where Maersk Drilling repurchases Maersk Drilling Shares, there can be no guarantee that this will happen. If Topco fails to acquire all of the issued and outstanding Maersk Drilling Shares, Maersk Drilling will not be a wholly-owned subsidiary of Topco and minority Maersk Drilling shareholders will have certain minority protection rights under Danish law and under the Topco Articles of Association. Any temporary or permanent delay in acquiring all Maersk Drilling Shares could adversely affect Topco’s ability to integrate Maersk Drilling’s business, including achieving targeted business benefits and synergies, as well as the market value of the Topco Shares and Topco’s access to capital and other sources of funding on acceptable terms.

Failure to acquire more than 90% of the Maersk Drilling Shares could also result in Topco not succeeding in removing the Maersk Drilling Shares from trading and official listing on Nasdaq Copenhagen. Nasdaq

 

31


Table of Contents

Copenhagen may refuse to delist the Maersk Drilling Shares, which would result in more onerous regulatory compliance obligations for the combined company and affect Topco’s ability to integrate the businesses and operations of Maersk Drilling and Noble. Further, refusal of the request to delist the Maersk Drilling Shares may increase the expenses of the Business Combination and the overall expenses of the combined company.

Each of Noble and Maersk Drilling’s directors and executive officers have interests in the Business Combination that are in addition to, or different from, any interests they might have as shareholders.

In considering the recommendations of the Noble Board and the Maersk Drilling Board, investors should be aware that the directors and executive officers of each of Noble and Maersk Drilling have interests in the proposed transaction that are in addition to, or different from, any interests they might have as shareholders, including the fact that Robert W. Eifler will serve as the President and Chief Executive Officer of Topco, Richard B. Barker, William E. Turcotte, Joey M. Kawaia and Blake A. Denton, each an executive officer of Noble, will serve as executive officers of Topco, Charles M. (Chuck) Sledge, the current Chairman of the Noble Board, will become chairman of the Topco Board, and Alan J. Hirshberg and Ann D. Pickard, each a director on the Noble Board, will be designated to the Topco Board by Noble upon the Closing, and similarly, that Claus V. Hemmingsen, the current Chairman of the Maersk Drilling Board, and Kristin H. Holth and Alastair Maxwell, each a director on the Maersk Drilling Board, will be designated to the Topco Board by Maersk Drilling upon the Closing. For more information, see the section entitled “The Business Combination—Interests of Noble’s Directors and Executive Officers in the Business Combination” and “The Business Combination—Interests of Maersk Drilling’s Directors and Executive Officers in the Business Combination”. You should consider these interests in connection with your vote on the related proposals.

Each of Noble and Maersk Drilling may have liabilities that are not known to the other party or to Topco.

Each of Noble and Maersk Drilling may have liabilities that the other party failed, or was unable, to discover in the course of performing its respective due diligence investigations. Noble or Maersk Drilling may learn additional information about the other party that materially adversely affects it, such as unknown or contingent liabilities and liabilities related to compliance with applicable laws. As a result of these factors, Noble, Maersk Drilling or Topco may incur additional costs and expenses and may be forced to later write-down or write-off assets, restructure operations, or incur impairment or other charges that could result in Noble, Maersk Drilling or Topco reporting losses. Even if Noble’s and Maersk Drilling’s due diligence has identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with its preliminary risk analysis. If any of these risks materialize, this could have a material adverse effect on Noble’s, Maersk Drilling’s or Topco’s financial condition and results of operations and could contribute to negative market perceptions about Noble’s, Maersk Drilling’s or Topco’s securities. Additionally, Noble and Maersk Drilling do not have any indemnification rights against the other party under the Business Combination Agreement. Accordingly, securityholders of Noble or Maersk Drilling could suffer a reduction in the value of their securities. Such securityholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by its directors or officers of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the registration statement or proxy statement/prospectus and the exchange offer prospectus relating to the Business Combination contained an actionable material misstatement or material omission.

Noble shareholders and Maersk Drilling shareholders are not entitled to appraisal or dissent rights in connection with the Business Combination or the Offer.

Appraisal or dissent rights are statutory rights that enable shareholders to dissent from certain extraordinary transactions, such as certain mergers, and to demand that the corporation pay the fair value for their Noble Shares or Maersk Drilling Shares, as applicable, as determined by a court in a judicial proceeding instead of receiving the consideration offered to shareholders in connection with the applicable transaction. Under Cayman law, holders of Noble Shares will not have rights to an appraisal of the fair value of their Noble Shares in connection with the Business Combination, and under Danish law, holders of Maersk Drilling Shares will not have rights to an appraisal of the fair value of their Maersk Drilling Shares in connection with the Offer.

 

32


Table of Contents

Failure to consummate the Business Combination could negatively impact the share price and the future business and financial results of Noble and/or Maersk Drilling.

If the Business Combination is not completed, the ongoing businesses of Noble or Maersk Drilling, respectively, may be adversely affected and, without realizing any of the benefits of having consummated the Business Combination, each of Noble and Maersk Drilling will be subject to a number of risks, including (but not limited to) the following:

 

   

Each of Noble and Maersk Drilling may experience negative reactions from the financial markets, current equity and debt holders, bank relationships and other stakeholders, including negative impacts on the price of the Noble Shares and/or Maersk Drilling Shares;

 

   

Each of Noble and Maersk Drilling may experience negative reactions from their respective customers, regulators and employees;

 

   

The consideration, negotiation and implementation of the Business Combination (including integration planning) will have required substantial commitments of time and resources by Noble and Maersk Drilling management, which could otherwise have been devoted to other opportunities beneficial to Noble or Maersk Drilling, respectively;

 

   

Each of Noble and Maersk Drilling could be subject to litigation related to any failure to complete the Business Combination or related to any enforcement proceeding commenced against Noble or Maersk Drilling to perform their respective obligations under the Business Combination Agreement;

 

   

Each of Noble and Maersk Drilling will be required to pay certain costs and expenses relating to the Business Combination, whether or not the Business Combination is completed;

 

   

The fact that Maersk Drilling is restricted from refinancing its outstanding indebtedness, including certain indebtedness that will become current in the fourth quarter of 2022 and is due to mature in the fourth quarter of 2023, prior to the completion of the Business Combination and the risk that, in the event that the Business Combination Agreement is not completed, Maersk Drilling may be unable to negotiate the refinancing of such indebtedness on the same or more favorable terms, or to find acceptable alternative financing; and

 

   

the Business Combination Agreement places certain restrictions on the conduct of the respective businesses of each of Noble and Maersk Drilling prior to completion of the Business Combination that may prevent each party from taking certain specified actions or otherwise pursuing business opportunities during the pendency of the Business Combination that such party would have taken or pursued if these restrictions were not in place.

If the Business Combination Agreement is terminated by Maersk Drilling because a final merger control decision by a governmental entity is issued that either prohibits one or more of the transactions contemplated by the Business Combination Agreement, or prevents the consummation of such transactions without the carrying out of certain actions, then Noble will be required to pay Maersk Drilling a termination fee of $50 million. Further, if the Business Combination Agreement is terminated under certain other specified circumstances, Noble or Maersk Drilling may be required to pay the other party a termination fee equal to $15 million.

There can be no assurance that the risks described above will not materialize. If any of those risks materialize, they may materially and adversely affect Noble’s and/or Maersk Drilling’s business, financial condition, financial results, ratings and share prices.

Noble shareholders and Maersk Drilling shareholders will have a reduced ownership and voting interest after the Business Combination and may exercise less influence over management in Topco than they currently have in Noble and Maersk Drilling, respectively.

Upon the completion of the Business Combination, Noble shareholders and Maersk Drilling shareholders will hold a percentage ownership of Topco that is smaller than such shareholder’s current percentage ownership

 

33


Table of Contents

of Noble or Maersk Drilling, respectively. Upon completion of the Business Combination, and assuming that all of the issued Maersk Drilling Shares are exchanged in the Offer, former shareholders of Noble as a group and former shareholders of Maersk Drilling as a group will each receive shares in the Business Combination constituting approximately 50% of the outstanding Topco Shares immediately after the consummation of the Business Combination. Because of this, current shareholders may have less influence on the management and policies of Topco than they currently have on the management and policies of Noble or Maersk Drilling, respectively.

Future sales or the availability for sale of substantial amounts of the Topco Shares, or the perception that these sales may occur, including following the Business Combination, could adversely affect the trading price of the Topco Shares and could impair the combined company’s ability to raise capital through future sales of equity securities.

Following the Business Combination, a relatively small number of shareholders will hold a large portion of the shares of the combined company and Topco will enter into the RRA upon the Closing to facilitate future sales of such shares.

Sales of a substantial number of the Topco Shares in the public markets, including sales of large blocks of Topco Shares by the parties entering into the RRA, or even the perception that these sales might occur (such as upon the filing of registration statements in connection with such sales), could impair the combined company’s ability to raise capital for its operations through a future sale of, or pay for acquisitions using, Topco’s equity securities.

Topco Shares or other securities may be issued from time to time as consideration for future acquisitions and investments. If any such acquisition or investment is significant, the number of Topco Shares, or the number or aggregate principal amount, as the case may be, of other securities that Topco may issue may in turn be substantial. Registration rights may also be granted covering those Topco Shares or other securities in connection with any such acquisitions and investments.

Topco cannot predict the effect that future sales of Topco Shares will have on the price at which the Topco Shares trades or the size of future issuances of Topco Shares or the effect, if any, that future issuances will have on the market price of the Topco Shares. Sales of substantial amounts of the Topco Shares, or the perception that such sales could occur, may adversely affect the trading price of the Topco Shares.

Risks Relating to Topco and its Business

Topco will incur direct and indirect costs as a result of the Business Combination.

Topco will incur costs and expenses in connection with and as a direct result of the Business Combination. These costs primarily relate to legal and professional fees directly related to the Business Combination and, upon completion of the Business Combination, additional charges will be incurred related to stock-based compensation associated with the accelerated vesting of cash and equity settled Noble RSU Awards held by Noble’s non-employee directors and cash-based bonuses expected to be paid to executive officers and certain other employees of Maersk Drilling. Such costs are expected to amount to a total of approximately $66 million. Actual costs may exceed those estimated by Topco because there may be further additional and unforeseen expenses directly incurred in connection with the Business Combination. Further, there will be further costs to integrate Maersk Drilling and Noble, and the combined company cannot assure you that it will realize all of the anticipated benefits of the Business Combination, including the synergies related to public company expenses, back-office support functions, sales and distribution, and integration of senior management and administration.

 

34


Table of Contents

Failure to recruit and retain key personnel could hurt Topco’s operations.

Topco will depend on the continuing efforts of key members of management, as well as other highly skilled personnel, to operate and provide technical services and support for Topco’s business worldwide. Historically, competition for the personnel required for drilling operations has intensified as the number of rigs activated, added to worldwide fleets or under construction has increased, leading to shortages of qualified personnel in the industry and creating upward pressure on wages and higher turnover. In addition, the oil and gas industry generally has increasingly struggled to attract talented and qualified personnel. Topco may experience a reduction in the experience level of personnel as a result of any increased turnover, which could lead to higher downtime and more operating incidents, which in turn could decrease revenues and increase costs. If increased competition for qualified personnel were to intensify in the future Topco may experience increases in costs or limits on operations.

Topco may not be able to retain customers or suppliers, and customers or suppliers may seek to modify contractual obligations with Topco, either of which could have an adverse effect on Topco’s business and operations. Third parties may terminate or alter existing contracts or relationships with Topco as a result of the Business Combination.

As a result of the Business Combination, Topco may experience impacts on relationships with customers and suppliers that may harm the combined company’s business and results of operations, including, in the case of customers of Maersk Drilling, as a result of a loss of the Maersk Drilling name and branding or the departure of certain Maersk Drilling employees. Certain customers or suppliers may seek to terminate or modify contractual obligations following the Business Combination whether or not contractual rights are triggered as a result of the Business Combination. There can be no guarantee that customers and suppliers will remain with or continue to have a relationship with Topco or do so on the same or similar contractual terms following the Business Combination. If any customers or suppliers seek to terminate or modify contractual obligations or discontinue their relationships with Topco, then Topco’s business and results of operations may be harmed. If Topco’s suppliers were to seek to terminate or modify an arrangement with Topco, then Topco may be unable to procure necessary supplies or services from other suppliers in a timely and efficient manner and on acceptable terms, or at all.

Noble and Maersk Drilling also have contracts with vendors, landlords, licensors and other business partners which may require Noble and Maersk Drilling, as applicable, to obtain consent from these other parties in connection with the Business Combination. If these consents cannot be obtained, Topco may suffer a loss of potential future revenue, incur costs and lose rights that may be material to the business of Topco. In addition, third parties with whom Noble and Maersk Drilling currently have relationships may terminate or otherwise reduce the scope of their relationship with either party in anticipation of the Business Combination. Any such disruptions could limit Topco’s ability to achieve the anticipated benefits of the Business Combination. The adverse effect of any such disruptions could also be exacerbated by a delay in the completion of the Business Combination or by a termination of the Business Combination Agreement.

Topco’s actual financial position and results of operations may differ materially from the unaudited pro forma financial information included in this proxy statement/prospectus and the exchange offer prospectus.

The unaudited pro forma condensed combined financial information contained in this proxy statement/prospectus and the exchange offer prospectus is presented for illustrative purposes only, incorporates certain assessments and judgments made solely by Noble and may not be an indication of what Topco’s financial position or results of operations would have been had the Business Combination been completed on the dates indicated. The unaudited pro forma condensed combined financial information has been derived from the audited historical financial statements of Noble and Maersk Drilling and certain adjustments, including the conversion of certain of Maersk Drilling’s financial statements to U.S. GAAP, and Noble has made certain assumptions regarding the combined company after giving effect to the Business Combination. The assets and liabilities of Maersk Drilling have been measured at fair value by Noble based on various preliminary estimates using

 

35


Table of Contents

assumptions that management believes are reasonable utilizing information currently available. The process for estimating the fair value of acquired assets and assumed liabilities has required Noble to use judgment in determining the appropriate assumptions and estimates. Noble’s preliminary determination is subject to further assessment and adjustments pending additional information sharing between the parties, more detailed third-party appraisals, and other potential adjustments. These estimates and assumptions may be revised as additional information becomes available and as additional analyses are performed. Differences between preliminary estimates in the pro forma financial information and the final acquisition accounting will occur and could have a material impact on the pro forma financial information and the combined company’s financial position and future results of operations.

Noble and Maersk Drilling are not yet combined businesses, and there are limitations on the information available to prepare the pro forma financial information. The assumptions made by Noble in preparing the pro forma financial information may not prove to be accurate, and other factors may affect Topco’s financial condition or results of operations following the completion of the Business Combination. Acquisition accounting rules require evaluation of certain assumptions, estimates or determination of financial statement classifications which are completed during the measurement period as defined in current accounting standards. Accounting policies of Topco and acquisition accounting rules may materially vary from those of Maersk Drilling. Any changes in assumptions, estimates, or financial statement classifications may be material and have a material adverse effect on the assets, liabilities or future earnings of Topco. Any potential decline in Topco’s financial condition or results of operations may cause significant variations in the share price of Topco. Please see “Unaudited Pro Forma Condensed Combined Financial Information”.

The projections considered by Noble and Maersk Drilling, and provided to their respective financial advisors, may not be realized.

The projections considered by Noble and Ducera, on the one hand, and by, Maersk Drilling, and provided to J.P. Morgan by Maersk Drilling management, on the other hand, reflect numerous estimates and assumptions that are inherently uncertain with respect to industry performance and competition, general business, economic, market and financial conditions and matters specific to Noble’s and Maersk Drilling’s respective businesses, including the factors described or referenced under “Cautionary Note Regarding Forward-Looking Statements” and/or listed in this proxy statement/prospectus and the exchange offer prospectus under this section entitled “Risk Factors,” all of which are difficult to predict, and many of which are beyond our control. The financial analyses presented by Ducera to the Noble Board and by J.P. Morgan to the Maersk Drilling Board, respectively, on November 9, 2021 speak only as of that date. There can be no assurance that the projections considered by Noble, Maersk Drilling, and provided to their respective financial advisors at the direction of Noble and Maersk Drilling, respectively, to use and rely upon such projections for purposes of their respective opinion and related financial analyses, will be realized or that actual results will not materially vary from such financial analyses and projections. In addition, since the financial projections cover multiple years, such information by its nature becomes less predictive with each successive year.

Changes to U.S., U.K., Cayman and other non-U.S. tax laws could adversely affect Topco.

The U.S. Congress, the European Commission, the Organization for Economic Co-operation and Development (“OECD”) and other supranational institutions and/or government agencies in jurisdictions where Topco and its affiliates do business have had an extended focus on issues related to the taxation of multinational corporations and several tax reforms have been proposed, which, if adopted, could increase the tax liabilities and adversely affect the results of operations of Topco and its affiliates (including Noble and its affiliates after the Business Combination). One example is in the area of “base erosion and profit shifting,” including situations where payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates. The OECD has advanced reforms focused on “base erosion and profit shifting” and implementing a global minimum tax rate of at least 15% for large multinational corporations on a jurisdiction-by-jurisdiction basis, known as the “two pillar plan.” On October 8, 2021, the OECD announced an accord endorsed by 136

 

36


Table of Contents

nations outlining the two pillar plan. While the implementation of the accord is uncertain, if legislation is enacted to implement the accord in the United States, the United Kingdom, Denmark and other countries in which Topco and its affiliates do business could change on a prospective or retroactive basis, and any such changes could adversely affect Topco and its affiliates (including Noble and its affiliates after the Business Combination). These changes could also affect the profitability prospects of Topco and the industry at large to the extent such cost increases cannot be reflected in day rates.

The tax rate that will apply to Topco is uncertain and may vary from expectations.

There can be no assurance that the Business Combination will improve Topco’s ability to maintain any particular worldwide effective corporate tax rate. Noble cannot give any assurance as to what Topco’s effective tax rate will be after the completion of the Business Combination because of, among other things, uncertainty regarding the tax policies of the jurisdictions in which Topco and its affiliates will operate. Topco’s actual effective tax rate may vary from Noble’s expectations, and such variance may be material. Additionally, tax laws or their implementation and applicable tax authority practices in any particular jurisdiction could change in the future, possibly on a retroactive basis, and any such change could have a material adverse impact on Topco and its affiliates. In particular, it should be noted that the main rate of corporation tax in the United Kingdom is set to increase from 19% to 25% with effect from April 1, 2023.

Transfers of Topco Shares outside the Depository Trust Company (“DTC”) may be subject to stamp duty or stamp duty reserve tax in the U.K., which would increase the cost of dealing in the Topco Shares.

On completion of the Business Combination it is anticipated that the Topco Shares will be issued to Cede & Co. (as nominee for DTC) and corresponding book-entry interests credited in the facilities of DTC. On the basis of current UK tax law and published HM Revenue and Customs (“HMRC”) practice, no charges to UK stamp duty or stamp duty reserve tax (“SDRT”) are expected to arise on the issue of the Topco Shares into DTC’s facilities or on transfers of book-entry interests in Topco Shares within DTC’s facilities. A non-statutory, pre-transaction clearance is being sought from HMRC to confirm, among other things, that no stamp duty or SDRT will be chargeable in respect of the issue of Topco Shares into the facilities of DTC.

A transfer of title in the Topco Shares from within the DTC system to a purchaser out of DTC, and any transfers of Topco Shares held in certificated form, will generally attract a charge to stamp duty or SDRT at a rate of 0.5% of any consideration. Any such duty must be paid (and the relevant transfer document, if any, stamped by HMRC) before the transfer can be registered in the company books of Topco. Any transfers of Topco Shares to an issuer of depository receipts or into a clearance system (including DTC) will generally be subject to stamp duty or SDRT at a rate of 1.5% of the consideration given or received or, in certain cases, the value of the Topco Shares transferred. The purchaser or transferee of the Topco Shares generally will be responsible for paying any stamp duty or SDRT payable.

In connection with the completion of the Business Combination, Topco expects to put in place arrangements to require that Topco Shares held in certificated form, or otherwise outside the DTC system, cannot be transferred into the DTC system until the transferor of the Topco Shares has first delivered the Topco Shares to a depositary specified by Topco so that any stamp duty (and/or SDRT) may be collected in connection with the initial delivery to the depositary. Any such Topco Shares will be evidenced by a receipt issued by the depositary. Before the transfer can be registered in the Topco company books, the transferor will also be required to put funds in the depositary to settle any resultant liability to stamp duty (and/or SDRT), which will generally be charged at a rate of 1.5% of the value of the shares.

For further information about the UK stamp duty and SDRT implications of holding Topco Shares please see the section entitled “Material Tax Considerations —Material U.K. Tax Considerations” below.

 

37


Table of Contents

If the Topco Shares and/or Topco Warrants are not eligible for deposit and clearing within the facilities of DTC, then transactions in the Topco Shares and/or Topco Warrants may be disrupted. Topco is expected to be required to indemnify DTC for any stamp duty and SDRT that may be assessed upon it as a result of its service as a depository and clearing agency for the Topco Shares and Topco Warrants.

The facilities of DTC are a widely-used mechanism that allow for rapid electronic transfers of securities between the participants in the DTC system, which include many large banks and brokerage firms. Topco expects that the Topco Shares and Topco Warrants will be eligible for deposit and clearing within the DTC system. Topco expects to enter into arrangements with DTC whereby Topco will agree to indemnify DTC for any stamp duty and SDRT that may be assessed upon it as a result of its service as a depository and clearing agency for the Topco Shares and Topco Warrants. Topco expects these actions, among others, should result in DTC agreeing to accept the Topco Shares and Topco Warrants for deposit and clearing within its facilities.

DTC is not obligated to accept the Topco Shares or Topco Warrants for deposit and clearing within its facilities in connection with this transaction and, even if DTC does initially accept the Topco Shares and Topco Warrants, it will generally have discretion to cease to act as a depository and clearing agency for the Topco Shares and Topco Warrants, including to the extent that any changes in U.K. law changes the stamp duty or SDRT position in relation to the Topco Shares or Topco Warrants. While Topco would pursue alternative arrangements to preserve the listing and maintain trading, any such disruption could have a material adverse effect on the market price of the Topco Shares.

A non-statutory, pre-transaction clearance is being sought from HMRC to confirm, among other things, that no stamp duty or SDRT will be chargeable in respect of the issue of Topco Shares or Topco Warrants into the facilities of DTC or in respect of any subsequent transfers of book-entry interests in Topco Shares and/or Topco Warrants within the DTC system. Whilst Topco expects to receive HMRC clearance on the relevant matters where clearance is being sought, in the event that there is any such liability in respect of stamp duty or SDRT for Topco (whether directly or indirectly as a result of the indemnity being provided to DTC), such liability will represent an additional cost for Topco and may consequently have an adverse effect on returns to shareholders.

Maersk Drilling currently is not subject to the internal controls and other compliance obligations of the U.S. securities laws, and Topco may not be able to timely and effectively implement controls and procedures over Maersk Drilling operations as required under the U.S. securities laws.

Maersk Drilling currently is not subject to the information and reporting requirements of the Exchange Act and other U.S. federal securities laws, including the compliance obligations relating to, among other things, the maintenance of a system of internal controls as contemplated by the Exchange Act. Subsequent to the completion of the Business Combination, Topco will need to timely and effectively implement the internal controls necessary to satisfy those requirements, which require annual management assessments of the effectiveness of internal control over financial reporting and a report by an independent registered public accounting firm addressing these assessments. Topco intends to take appropriate measures to establish or implement an internal control environment at Maersk Drilling aimed at successfully fulfilling these requirements. However, it is possible that Topco may experience delays in implementing or be unable to implement the required internal financial reporting controls and procedures, which could result in increased costs, enforcement actions, the assessment of penalties and civil suits, failure to meet reporting obligations and other material and adverse events that could have a negative effect on the market price for Topco Shares.

Topco intends to seek approval from the Court for a capital reduction to create distributable reserves in order to pay dividends.

As further described above, under English law, dividends may only be paid and share repurchases and redemptions must generally be funded only out of “distributable reserves.” In the absence of such distributable reserves, Topco may seek to create distributable reserves that involves a reduction in Topco’s share premium account, which requires the approval of the Court and, in connection with seeking such Court approval, the

 

38


Table of Contents

approval of Topco shareholders would be sought. Topco is not aware of any reason why the Court would not approve the creation of distributable reserves in this manner; however, the issuance of the required order is a matter for the discretion of the Court. There will also be no guarantee that the approvals by Topco shareholders will be obtained. In the event that distributable reserves of Topco are not created, no distributions by way of dividends, share repurchases or otherwise will be permitted under English law until such time as the group has created sufficient distributable reserves from its business activities.

The rights of holders of Topco Shares to be received by Noble shareholders in connection with the Business Combination will be different from the rights of holders of Noble Shares due to the difference between Cayman and English law.

Upon completion of the Business Combination, Noble shareholders will become Topco shareholders and their rights as shareholders will be governed by the Topco Articles of Association and English law and regulation. The rights associated with the Noble Shares are different than the rights associated with Topco Shares. Differences between the rights of Noble shareholders before the Business Combination and the rights of Topco shareholders following the Business Combination include differences with respect to, among other things, distributions, dividends, share repurchases and redemptions, shareholder pre-emption rights, the duties of directors, the process for the election and removal of directors, conflicts of interests of directors, the indemnification of directors and officers, limitations on director liability, the convening of annual meetings of shareholders and special shareholder meetings, the advance notice provisions for meetings, voting rights and resolution approval thresholds, the quorum for shareholder meetings, the adjournment of shareholder meetings, shareholder proposals, shareholder suits, reporting requirements, inspection of books and records, disclosure of interests in shares, rights of dissenting shareholders, anti-takeover measures, provisions relating to the ability to amend the articles of association, forum and venue, and enforcement of civil liabilities against foreign persons. While Noble does not believe that these differences will have a materially adverse effect on Noble shareholders who become Topco shareholders, situations may arise where the rights associated with Noble Shares would have provided benefits to Noble shareholders that will not be available with respect to their holdings of Topco Shares. See “Comparison of Shareholder Rights”.

As a result of different shareholder voting requirements in the United Kingdom relative to the Cayman Islands, Topco will have less flexibility with respect to certain aspects of capital management than Noble currently has.

Under English law, the directors of a public limited company may only, other than in certain limited circumstances, issue shares with prior shareholder authorization and pre-emption rights apply by default to any such share issues. Shareholder authorizations to allot shares and disapply pre-emption rights may be granted for a period of five years and so it is intended, prior to the Business Combination, for Topco to pass (i) an ordinary resolution to allot up to 27,017,235 ordinary shares; and (ii) a special resolution to disapply pre-emption rights in respect of the allotment of up to 27,017,235 ordinary shares, in each case for a period of five years from the date of the resolution. Under the Noble Articles and Cayman law, the board of directors may issue shares (within the limits authorized in the Noble Articles) and pre-emption rights do not apply. In addition, under English law, a company is generally only authorized to repurchase its own shares when it has been authorized to do so by an ordinary resolution of the shareholders, whereas the current Noble Articles, and Cayman law, permit share purchases in the circumstances agreed by Noble and the holder of the shares. Topco is expected to pass an ordinary resolution, prior to the Business Combination, authorizing the repurchase of up to 15% per annum of the issued share capital as of the beginning of each fiscal year for a five year period (subject to an overall aggregate maximum number of shares to be set forth in the resolution).

 

39


Table of Contents

After the completion of the Business Combination, attempted takeovers of Topco will be governed by English law, and certain applicable Danish takeover restrictions could prevent existing Topco shareholders from participating in transactions regarding Topco Shares.

Cayman laws regarding directors’ fiduciary duties give the board of directors broad latitude to defend against unwanted takeover proposals. As a UK incorporated company, Topco is subject to English law, as discussed in greater detail under “Description of Topco Securities.” An English public company is potentially subject to the protections afforded by the Takeover Code if, among other factors, a majority of its directors are resident within the UK, the Channel Islands or the Isle of Man. Based upon Topco’s current and intended plans for its directors, it is anticipated that the Takeover Code will not apply to Topco. However, it is possible that, in the future, circumstances could change that may cause the Takeover Code to apply to Topco.

Further, it could be more difficult for Topco to obtain shareholder approval for a merger or negotiated transaction after the closing of the Business Combination because the shareholder approval requirements for certain types of transactions differ, and in some cases are greater, under English law than under Cayman law. See “Description of Topco Securities”.

Following the listing of Topco Shares in Denmark on Nasdaq Copenhagen, certain Danish takeover restrictions will likely apply to attempted takeovers of Topco. The Danish Takeover Order includes rules concerning public tender offers for the acquisition of shares admitted to trading on a regulated market (including Nasdaq Copenhagen). Pursuant to the Danish rules on mandatory tender offers, if a shareholding is transferred, directly or indirectly, in a company with one or more share classes admitted to trading on a regulated market, to an acquirer or to persons acting in concert with such acquirer, the acquirer and the persons acting in concert with such acquirer, if applicable, shall give all shareholders of the company the option to dispose of their shares on identical terms, if the acquirer, or the persons acting in concert with such acquirer, as a result of the transfer, gains control over the company as a result of the transfer. Control exists if the acquirer, or persons acting in concert with such acquirer, directly or indirectly, holds at least one-third of the voting rights in the company, unless it can be clearly proven in special cases that such ownership does not constitute control. Exemptions from the mandatory tender offer rules may only be granted under special circumstances by the DFSA.

The application of the Danish mandatory tender offer rule could inter alia have a deterrent effect on potential acquirers of Topco Shares if such acquisition would result in a transfer of control over Topco, if this would trigger an obligation to make a mandatory tender offer.

English law requires that companies meet certain additional financial requirements before they can declare dividends or repurchase shares and such requirements may affect Topco’s ability to declare dividends or repurchase shares following the Business Combination.

Under English law, a company generally can declare dividends, make distributions or repurchase shares (other than out of the proceeds of a new issuance of shares made for that purpose) only out of distributable reserves. Distributable reserves are a company’s accumulated, realized profits, to the extent not previously utilized for distributions or capitalization, less its accumulated, realized losses, to the extent not previously written off in a reduction or reorganization of capital.

Prior to the effective time of the Business Combination, Noble, as the current sole shareholder of Topco, will pass resolutions to approve a proposed reduction of capital after completion of the Business Combination (which for this purpose means upon completion of the Offer), to: (i) cancel the shares which will be held by Noble prior to the Business Combination and to reduce its share premium account; (ii) cancel any Capitalization shares which are issued by Topco after completion of the Business Combination; and (iii) reduce the share premium created by the issue of the Topco Shares in connection with the Cayman Merger and, if applicable, the Offer, in each case to create distributable reserves from which Topco may declare and pay dividends in the future. As soon as practicable following completion of the Business Combination (which for this purpose means

 

40


Table of Contents

upon completion of the Offer) Topco will seek the approval of the Court to such cancellation and reduction through a customary process, which is required for the creation of distributable reserves to be effective. The approval of the Court is expected to be received approximately four weeks after the completion of the Business Combination. Prior to the receipt of the approval, Topco will be unable to declare dividends, make distributions or repurchase any of its own shares. If the approval of the Court is not received, it is expected that Topco will be subject to such limitation on its ability to declare dividends, make distributions or repurchase shares for the foreseeable future.

The market price of Topco Shares may be volatile, and the value of your investment could materially decline.

Investors who hold Topco Shares may not be able to sell their shares at or above the price at which they purchased the Noble Shares. The prices of Noble Shares and Maersk Drilling Shares have fluctuated materially from time to time, and Topco cannot predict the price of the Topco Shares. Broad market and industry factors may materially harm the market price of Topco Shares, regardless of Topco’s operating performance. In addition, the price of Topco Shares may be dependent upon the projections, valuations and recommendations of the analysts who cover the Topco business, and if its results or financial guidance do not meet the analysts’ projections and expectations, Topco’s share price could decline as a result of analysts lowering their projections, valuations and recommendations or otherwise.

Following the completion of the Business Combination, Topco may be subject to UK corporation tax liabilities in the future under the UK derivative contracts regime in respect of the Topco Warrants.

Topco is expected to be subject to UK corporation tax pursuant to the UK derivative contracts regime in respect of the Topco Warrants, subject to any change in circumstances of the Topco Warrants. Under this regime, the profits chargeable to corporation tax in respect of the Topco Warrants, and the losses allowable by way of relief, would be calculated by reference to credits and debits which, as a general rule, follow the amounts that are recognized for accounting purposes in determining profit or loss in accordance with generally accepted accounting practice. Topco may therefore be subject to future charges to UK corporation tax depending on the movements in the fair value of the Topco Warrants from time to time, in line with the accounting treatment of the Topco Warrants.

Danish tax considerations could adversely affect Topco.

The Danish Tax Authorities may challenge whether Topco is entitled to a Danish withholding tax exemption on dividends from Maersk Drilling. Topco is a tax resident of the U.K. and will own a majority of the Maersk Drilling Shares following the closing of the Offer. Thus, Topco is expected to be entitled to the benefits under the double tax treaty between Denmark and the U.K. in regard to dividend distributions from Maersk Drilling, which would mean that dividends could be distributed from Maersk Drilling to Topco without Danish withholding tax.

In order to qualify for a withholding tax reduction with under the double tax treaty between Denmark and the U.K., the recipient of dividends must be a treaty covered person and the beneficial owner of such dividends.

The view of the Danish Tax Authorities is that the beneficial ownership assessment is a transaction-based approach whereby the decisive factors include the level of activity and economic risk undertaken by the recipient and the ability to demonstrate real use and enjoyment rights in each case of any dividends received. Furthermore, Danish anti-avoidance provisions provide a legislative basis for the Danish tax authorities to deny a recipient of dividends, even though such recipient would otherwise qualify as the beneficial owner, the benefits of a double tax treaty in situations where the main purpose or one of the main purposes of an arrangement or transaction is to gain a tax advantage that would contradict the objective or purpose of a double tax treaty and the arrangement or transaction is considered artificial. An arrangement or transaction will be considered artificial if it has no valid commercial reasons. In practice, the Danish Tax Authorities consider whether a company is merely interposed for tax reasons and acts solely as a conduit.

 

41


Table of Contents

Topco is a tax resident of the U.K. and is expected to conduct certain management functions relating to the holding of shares, financing, cash management, incentive compensation and other relevant holding company functions. In addition, Topco may in the future decide to invest in other assets and conduct other activities and, in such case, Topco management is expected to decide whether holding these assets or conducing these activities should be made directly at Topco, at Maersk Drilling or at any other subsidiary. Topco management believes that the characteristics of Topco as (i) a publicly listed company with numerous shareholders, (ii) management’s right to dispose of dividends received as it chooses and (iii) the economic risks born by Topco demonstrate that Topco is the beneficial owner of dividends from Maersk Drilling and not a conduit for distribution of such dividends to the shareholders and, accordingly, that the anti-avoidance rules are not expected to apply.

Topco will be a listed company on the NYSE and Nasdaq Copenhagen. Danish case law has shown that the Danish tax authorities and the Danish administrative courts have determined that there is a presumption of beneficial ownership at the level of a listed company, provided that (i) such company’s shares are listed on recognized markets, (ii) such company’s shares are held by a significant number of shareholders, (iii) the shares in the listed company are actually traded on the market, and (iv) there are viable commercial arguments supporting the establishment of the company.

The tests for beneficial ownership and application of Danish anti-avoidance rules are subjective and the ownership of Maersk Drilling will as such entail an inherent risk of a challenge from the Danish tax authorities. The current Danish withholding tax rate is 27% of the distribution. In the event that the Danish tax authorities take the view that the Topco is not the beneficial owner of dividends distributed, and therefore that Danish withholding tax should have been paid, any such payment would increase Topco’s tax burden, and hence its cash flows and financial position, and may prejudice Maersk Drilling’s ability to pay dividends itself. In the event that the Danish tax authorities should regard an EU “blacklisted” entity as the beneficial owner, a proportionate part of any distributions could be subject to 44% Danish withholding taxation.

Risks Relating to Noble’s Business

You should read and consider risk factors specific to Noble’s business that will also affect the combined company after the Business Combination. These risks are described in the section entitled “Risk Factors” in Noble’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and in other documents incorporated by reference into this proxy statement/prospectus and the exchange offer prospectus. Please see the section entitled “Where You Can Find More Information”.

Risks Relating to the Industry

You should read and consider risk factors specific to the industry in which Noble and Maersk Drilling operate. These risks are described in the section entitled “Risk Factors” in Noble’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Risks Relating to Maersk Drilling’s Business

Risks Relating to the Maersk Drilling Group’s Business and Operations

The Maersk Drilling Group’s business involves numerous operating hazards. If a significant accident or other event occurs, and is not fully covered by the Maersk Drilling Group’s insurance policies or any enforceable or recoverable indemnity, it could have a material adverse effect on the Maersk Drilling Group’s business, financial condition, and results of operations.

The Maersk Drilling Group’s operations are subject to hazards inherent in drilling for oil and natural gas, such as blowouts, reservoir damage, loss of production, loss of well control, punch through (for example, when one leg of the drilling rig breaks through the sea floor crust, destabilizing the rest of the rig), lost or stuck drill strings, equipment defects, craterings, fires, explosions and pollution. Offshore drilling and the provision of well

 

42


Table of Contents

services require the use of heavy equipment and exposure to hazardous conditions which carry inherent health and safety risks. The Maersk Drilling Group’s operations are also subject to hazards inherent in marine operations, such as capsizing, grounding, navigation errors, collision, oil and hazardous substance spills, extensive uncontrolled fires, damage from severe weather conditions, and marine life infestations. Such hazards could expose the Maersk Drilling Group to the risk of suspension or termination of operations, regulatory penalties or sanctions, property, environmental and other damage claims by customers or other third parties, which may in turn have a material adverse effect on the Maersk Drilling Group’s business, financial condition, results of operations, and reputation.

The Maersk Drilling Group’s insurance policies may not adequately cover losses, and the Maersk Drilling Group does not have insurance coverage or rights to an indemnity for all risks. In addition, the Maersk Drilling Group’s insurance coverage will not provide sufficient funds in all situations to protect the Maersk Drilling Group from all liabilities that could result from its operations, including because the amount of the Maersk Drilling Group’s insurance cover may be less than the related impact on enterprise value after a loss, and the Maersk Drilling Group’s coverage also includes policy limits. As a result, the Maersk Drilling Group retains the risk through paying directly for any losses in excess of these limits. The Maersk Drilling Group may also decide to retain substantially more risk through reduction of its insurance policies, and thus paying directly for potential losses in the future.

Although it is the Maersk Drilling Group’s policy to obtain contractual indemnities for as much as possible, it may not always be able to negotiate provisions to protect against all risks. Further, even when the Maersk Drilling Group receives indemnities from customers these may not be easily enforced and will be of limited value if the relevant customers do not have adequate resources to indemnify the Maersk Drilling Group.

No assurance can be made that the Maersk Drilling Group has, or the combined company will be able to maintain in the future, adequate insurance or indemnity against certain risks, and there is no assurance that such insurance or indemnification agreements will adequately protect the Maersk Drilling Group and the combined company against liability from all of the consequences of the hazards and risks described above. The occurrence of a significant accident or other adverse event which is not fully covered by the Maersk Drilling Group’s insurance or any enforceable or recoverable indemnity from a customer could result in substantial losses for the Maersk Drilling Group and could materially adversely affect the Maersk Drilling Group’s results of operations, cash flow and financial condition. The occurrence of a significant accident or other adverse event could also cause the cost of insurance to increase significantly and have a material adverse effect on the Maersk Drilling Group’s earnings, cash flow and financial condition.

The Maersk Drilling Group relies on third-party subcontractors to complete some parts of its projects and its operations may be adversely affected by the sub-standard performance or non-performance of those third-party subcontractors.

The Maersk Drilling Group engages third-party subcontractors to perform some parts of its projects and in respect of new business models a majority of the services under a project may be subcontracted to third-party subcontractors. Subcontractors are used to perform certain services and to provide certain input in areas where the Maersk Drilling Group does not have requisite expertise. The subcontracting of work exposes the Maersk Drilling Group to risks associated with planning, interface, non-performance, delayed performance or substandard performance by its subcontractors. Any inability to hire qualified subcontractors could hinder successful completion of a project. Further, the Maersk Drilling Group’s employees may not have the requisite skills to be able to monitor or control the performance of these subcontractors. The Maersk Drilling Group may suffer losses on contracts if the amounts it is required to pay for subcontractor services exceed its original estimates. Remedial or mitigating actions, such as requiring contractual obligations on subcontractors that are similar to those the Maersk Drilling Group has with its customers, and requesting parent guarantees to cover non-performance by subcontractors, may not be available or sufficient to mitigate the risks associated with subcontractors. For example, the Maersk Drilling Group has experienced issues with the performance of some of

 

43


Table of Contents

its key suppliers in the past, in particular in relation to delays in the delivery and maintenance of its subsea well-control equipment. Such issues could have a negative effect on Maersk Drilling Group’s business, financial condition, and results of operations.

The Maersk Drilling Group relies on third-party suppliers to provide parts, crew and equipment, and its operations may be adversely affected by supplier production disruptions, quality and sourcing issues, price increases or consolidation of suppliers as well as equipment breakdowns.

The Maersk Drilling Group’s reliance on third-party suppliers, manufacturers and service providers to secure equipment and crew used in the Maersk Drilling Group’s drilling operations exposes it to volatility in the quality, price and availability of such items. Certain specialized parts, crew and equipment used by the Maersk Drilling Group in its operations may be available only from a single or a small number of suppliers. A disruption in the deliveries from such third-party suppliers, capacity constraints, production disruptions, price increases, defects or quality-control issues, recalls or other decrease in the availability or servicing of parts and equipment could adversely affect the Maersk Drilling Group’s ability to meet its commitments towards its customers, adversely impact operations and revenues by resulting in uncompensated downtime, reduced day rates under the relevant drilling contracts, cancellation or termination of contracts, or increased operating costs. In addition, consolidation of suppliers may limit the Maersk Drilling Group’s ability to obtain supplies and services when needed at an acceptable cost or at all.

Equipment deficiencies or breakdowns, whether due to faulty parts, quality control issues or inadequate installation, may result in increased maintenance costs and could adversely affect the Maersk Drilling Group’s operations and revenues by resulting in financial downtime. For example, the Maersk Drilling Group has a multi-year maintenance project to overhaul jacking gears on certain jack-up rigs involving significant costs. While the Maersk Drilling Group is pursuing recovery options in respect of certain of the project costs, there can be no assurance as to the extent to which Maersk Drilling will recover those costs. If mitigation measures put in place by the Maersk Drilling Group are not effective, it could lead to significant financial downtime, adversely affect the Maersk Drilling Group’s ability to meet its commitments towards its customers, potential cancellation or termination of drilling contracts, suspension or termination of operations, regulatory penalties or sanctions, property, environmental and other damage claims by customers or other third parties, which may in turn have a material adverse effect on the Maersk Drilling Group’s business, financial condition, results of operations, and reputation.

The Maersk Drilling Group faces risks associated with creating and executing new business models, particularly when such business models involve a risk profile, remuneration, or financial scheme that is different from a conventional drilling contract.

As an important part of its “Smarter Drilling for Better Value” strategy, the Maersk Drilling Group is exploring, and has in the past, implemented various degrees of innovative business models with customers and partners in order to expand its share of the value chain, while simultaneously creating better outcomes for its customers and long-term resilience of its business through increased customer collaboration, differentiation and utilization. Although such business model innovation is intended to offer further earnings opportunities for the Maersk Drilling Group, there are risks associated with creating and executing new business models, particularly when such business models involve a risk profile, remuneration, or financial scheme that is different from the Maersk Drilling Group’s conventional drilling contracts.

The Maersk Drilling Group is currently implementing two broad categories of business models including:

(i) integrating new services into joint offerings to customers as an integrated service provider with the objective of removing waste in the well-delivery supply chain through better orchestration and alignment of incentives; and

(ii) offering new financial models focused on risk and reward sharing through, among other things, deferred payments, fixed pricing or co-investments, enabling operators to develop fields that would

 

44


Table of Contents

otherwise be economically challenged. However, forecasting the success of any new business model is inherently uncertain and depends on a number of factors both within and outside of the Maersk Drilling Group’s control. The Maersk Drilling Group’s actual revenue and profit generated from such business models may be significantly greater or less than forecasts. In addition, the efficiencies anticipated from new business models may fail to be realized, the costs may be higher and the counterparty risk greater than expected. In addition, as the Maersk Drilling Group creates and executes more new business models and expands into other parts of the value chain, the Maersk Drilling Group’s risk profile may continue to shift. See also “—The Maersk Drilling Group relies on third-party subcontractors to complete some parts of its projects and its operations may be adversely affected by the sub-standard performance or non-performance of those third-party subcontractors”, “—The Maersk Drilling Group’s international activities increase the compliance risk associated with applicable anti-corruption laws” and “—The Maersk Drilling Group’s international activities increase the compliance risks associated with economic and trade sanctions imposed by the United States, the European Union and other jurisdictions.” Entering into new business models could have an adverse impact on the Maersk Drilling Group’s business, financial condition, and results of operations.

The Maersk Drilling Group’s drilling rigs are subject to damage or destruction by severe weather, and its drilling operations may be affected by severe weather conditions.

Some of the Maersk Drilling Group’s drilling rigs are located in areas that frequently experience hurricanes and other forms of severe weather conditions. For example, rigs located in certain parts of the North Sea may be subject to strong currents and low service temperatures, and rigs operating in the US Gulf of Mexico may, from time to time, be subject to tropical storm systems with high winds and waves. These conditions can cause damage or destruction to its drilling rigs. Further, high winds and turbulent seas could cause the Maersk Drilling Group to suspend operations on drilling rigs for significant periods of time. Even if its drilling rigs are not damaged or lost due to severe weather, the Maersk Drilling Group may experience disruptions in its operations due to evacuations, reduced ability to transport personnel or necessary supplies to the drilling unit, or damage to its customers’ platforms and other related facilities. Future severe weather could result in the loss or damage to the Maersk Drilling Group’s rigs or curtailment of its operations, which could adversely affect the Maersk Drilling Group’s business, financial condition, and results of operations.

The Maersk Drilling Group may experience reduced profitability or not fully realize its backlog of drilling revenue if its customers terminate, seek to renegotiate or fail to exercise an option to extend its drilling contracts, or if it fails to secure new drilling contracts.

The Maersk Drilling Group may be subject to the risk of its customers seeking to terminate or renegotiate their contracts. Customers’ financial positions, as well as restricted credit markets, may adversely affect their ability to perform their obligations under drilling contracts with the Maersk Drilling Group. As an example, the Maersk Drilling Group has experienced, as a result of events significantly adversely affecting customers’ demand for offshore drilling services (such as the COVID-19 pandemic), customers seeking to terminate or renegotiate their contracts. If the Maersk Drilling Group’s customers cancel or are unable or unwilling to renew some of their contracts, the Maersk Drilling Group will need to secure a new contract for that drilling rig and any time lag in doing so could lead to a period of non-utilization. In addition, where the Maersk Drilling Group tenders for new contracts, it is generally difficult to predict whether it will be awarded contracts on favorable terms or at all. The tenders are affected by a number of factors beyond the Maersk Drilling Group’s control, such as market conditions, competition (including the intensity of the competition in a particular market), financing arrangements and government approvals required by customers. If the Maersk Drilling Group is unable to secure new contracts on a timely basis and on substantially similar or better terms, if contracts are disputed or suspended for a period of time, or if a number of its contracts are renegotiated, such events would adversely affect the Maersk Drilling Group’s business, financial condition, and results of operations.

In addition, customers exploring for or producing oil and/or natural gas (“E&P Companies”) commonly ask for options to extend their drilling contracts to include additional work. Such options may expose the Maersk

 

45


Table of Contents

Drilling Group to risk as the customer may decide not to exercise the option and the Maersk Drilling Group may, in the meantime, have to decline other work. In order to mitigate this risk, options should be exercised with a reasonable notice, however, getting E&P Companies to agree to include adequate notice provisions is difficult to achieve in a weak market. The need for long notice periods reflects the long lead times that characterize the industry in which the Maersk Drilling Group operates. Drilling rigs are often contracted long in advance of the date on which drilling commences and without adequate notice periods for options, the Maersk Drilling Group’s ability to market the rig effectively for future contacts may be compromised. Even if the customer decides to exercise the option and provides adequate notice, the terms of the option may be less favorable than the Maersk Drilling Group may otherwise be able to secure with alternative contracts.

Most of the Maersk Drilling Group’s drilling contracts may be cancelled by the customer without a termination fee becoming payable upon the occurrence of events beyond the Maersk Drilling Group’s control such as the loss or destruction of the drilling rig, or the suspension of drilling operations for a specified period of time as a result of a breakdown of critical equipment. While most of its contracts require the customer to pay a termination fee in the event of an early cancellation without cause, early termination payments will in most cases not fully compensate the Maersk Drilling Group for the full revenue loss of the contract and could result in the drilling rig becoming idle for an extended period of time. If the Maersk Drilling Group or its customers are unable to perform under existing contracts for any reason, or if the Maersk Drilling Group replaces terminated contracts with new contracts having less favorable terms, the Maersk Drilling Group’s backlog of estimated revenue would decline, adversely affecting the Maersk Drilling Group’s business, financial condition, and results of operations.

Additionally, the Maersk Drilling Group’s customers may be entitled to pay a waiting, or standby, rate lower than the full operational day rate if a drilling rig is not available to be fully operational for the customer. In addition, if a drilling rig is taken out of service for maintenance and repair for a period of time exceeding the scheduled maintenance periods set forth in the drilling contract, the Maersk Drilling Group may not be entitled to payment of day rates until the rig is able to work. If the interruption of operations were to exceed a determined period, the Maersk Drilling Group’s customers may have the right to pay a rate that is significantly lower than the waiting rate for a period of time or may terminate the drilling contracts related to the subject rig. Prolonged payment of reduced rates or termination of any drilling contract as a result of an interruption of operations could materially adversely affect the Maersk Drilling Group’s business, financial condition, and results of operations.

The announcement and pendency of the Business Combination, and uncertainty about the effects of the Business Combination, may increase the risks outlined above and may adversely affect the Maersk Drilling Group’s ability to pursue otherwise attractive business opportunities as suppliers, vendors, partners, customers and other counterparties defer entering into contracts with, or making other decisions concerning the Maersk Drilling Group or seek to modify or terminate existing relationships with the Maersk Drilling Group.

The Maersk Drilling Group has certain customer concentrations, and the loss of a significant customer would adversely impact its financial results.

For the year ended December 31, 2021, six customers accounted for 77% of the Maersk Drilling Group’s consolidated revenue. Many of these relationships have lasted over 10 years. Of the $1.9 billion in contracted backlog as of December 31, 2021 (backlog represents expected revenues for 2022 and beyond and excludes Maersk Inspirer), 93% is attributable to six customers. See “Maersk Drilling’s Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contract Drilling Services Backlog.” The loss or material reduction of business from a significant customer could therefore have a material adverse impact on the Maersk Drilling Group’s results of operations and cash flows. Moreover, the Maersk Drilling Group’s drilling contracts subject it to counterparty risks. See “—The Maersk Drilling Group is exposed to the credit risks of key customers and certain other third parties.” The ability of each of the Maersk Drilling Group’s counterparties to perform its obligations under a contract with it will depend on a number of factors that are beyond its control such as the overall financial condition of the counterparty. Should a significant customer fail to honor its

 

46


Table of Contents

obligations under an agreement with the Maersk Drilling Group, the Maersk Drilling Group could sustain losses, which could have a material adverse effect on its business, financial condition, and results of operations.

Loss of key personnel or the failure to obtain or retain highly skilled personnel could have a material adverse effect on the Maersk Drilling Group’s operations.

The Maersk Drilling Group’s success depends on its retention of key personnel and its ability to recruit, retain and develop skilled personnel for its business. The demand for personnel with the capabilities and experience required in the oil and natural gas services industries is high, and even higher when market conditions are strong, and success in attracting and retaining such employees is not guaranteed. In addition, the oil and gas industry generally has increasingly struggled to attract talented and qualified personnel. There is intense competition for skilled personnel and there are, and may continue to be, shortages in the availability of engineers and other appropriately skilled people at all levels. Shortages of qualified personnel or the Maersk Drilling Group’s inability to obtain and retain qualified personnel could have a material adverse effect on the Maersk Drilling Group’s business, financial condition, and results of operations.

In addition, uncertainty about the effect of the Business Combination on employees may impair the Maersk Drilling Group’s ability to retain and motivate key personnel. If the key employees depart because of uncertainty about their future roles and the potential complexities of the Business Combination, the Maersk Drilling Group’s business, financial condition and results of operations could be materially and adversely affected. See also “Labor interruptions could have a material adverse effect on the Maersk Drilling Group’s Operations.”

Labor interruptions could have a material adverse effect on the Maersk Drilling Group’s operations.

As of December 31, 2021, the Maersk Drilling Group had approximately 1,700 offshore and approximately 800 onshore employees. Labor interruptions may materially impact the Maersk Drilling Group. Certain of the Maersk Drilling Group’s employees and contractors in international markets, such as Norway and to a lesser extent Denmark, are represented by labor unions and work under collective bargaining or similar agreements, which are subject to periodic renegotiation. Although the Maersk Drilling Group has not experienced any labor disruptions in connection with its own personnel, there can be no assurance that labor disruptions by the Maersk Drilling Group’s employees will not occur in the future. Further, unionized employees of third parties on whom the Maersk Drilling Group relies may be involved in strikes or other forms of labor unrest, causing operational disruptions for the Maersk Drilling Group. Such industrial actions could result in additional costs to the Maersk Drilling Group, as well as limitations on the Maersk Drilling Group’s ability to operate its drilling rigs or provide services to its customers, which may have a material adverse impact on its business, financial condition, and results of operations. Further strikes are considered a possibility each year during annual salary negotiations. If future labor strikes force Maersk Drilling Group to shut down any of its operations, it could have a material adverse impact on its business, financial condition, and results of operations.

In addition, the Maersk Drilling Group will be required to reduce the size of its workforce post-Business Combination. Even if the process is implemented in accordance with the labor law practices in the relevant jurisdictions, there is a risk that certain redundancies may be challenged by employees or labor unions, and thus leading to multiple negotiations or legal proceedings. Such legal proceedings would result in additional costs for legal fees and, if unfavorable decisions were to be made against the Maersk Drilling Group, fines or damages. There is also a risk that the process will give rise to labor actions. Furthermore, major redundancies may also negatively affect the remaining personnel’s work environment and thereby harm daily operations.

 

47


Table of Contents

The market value of equipment currently owned by the Maersk Drilling Group, including rigs, newbuilds and any further rigs the Maersk Drilling Group may acquire in the future may decrease. This could cause the Maersk Drilling Group to incur losses due to impairment of book values or if it decides to sell assets.

The fair market value of the drilling rigs and equipment currently owned by the Maersk Drilling Group and/or those the Maersk Drilling Group may acquire in the future, may increase or decrease depending on a number of factors, including:

 

   

general economic and market conditions affecting the offshore contract drilling industry, including competition from other offshore contract drilling companies;

 

   

types, sizes and ages of the drilling rigs and equipment;

 

   

supply and demand for drilling rigs and equipment;

 

   

cost of newbuilds;

 

   

impact on financing by way of certain covenants under the Maersk Drilling Facilities Agreements;

 

   

prevailing level of drilling services contract day rates and utilization;

 

   

operational cost levels of rigs;

 

   

future expectations of contract day rates, utilization, and operational cost levels;

 

   

discount rate used for future earnings;

 

   

government laws and regulations, including environmental protection laws and regulations and such laws becoming more stringent; and

 

   

technological advances.

The Maersk Drilling Group evaluates its book values on a regular basis based on the factors above and if drilling rig and equipment values fall significantly, the Maersk Drilling Group may have to record an impairment loss in its financial statements, which could adversely affect the Maersk Drilling Group’s financial results and condition. In 2021, the Maersk Drilling Group recognized an impairment reversal of $11 million in connection with the sale of Maersk Gallant.

Upgrade, refurbishment and repair projects are subject to risks, including delays and cost overruns, which could have an adverse impact on the Maersk Drilling Group’s available cash resources and results of operations.

The Maersk Drilling Group incurs upgrade, refurbishment and repair expenditures for its rigs from time to time, typically when upgrades are required by industry standards and/or by law. Such expenditures are also necessary in response to requests by customers, inspections, regulatory or certifying authorities or when a rig is damaged. Upgrade, refurbishment and repair projects are subject to execution risks, including cost overruns or delays resulting from, for example:

 

   

unexpected long delivery times for, or shortages of, key equipment, parts and materials as has occurred from time to time;

 

   

shortages of skilled labor and other shipyard personnel necessary to perform the work;

 

   

unforeseen increases in the cost of equipment, labor and raw materials, particularly steel as has occurred from time to time;

 

   

unforeseen design and engineering problems;

 

   

latent damages to or deterioration of hull, equipment and machinery in excess of engineering estimates and assumptions, as may occur as a result of operating in a harsh environment such as certain parts of the North Sea;

 

48


Table of Contents
   

health, safety, security and environment (“HSSE”) incidents occurring during the project;

 

   

disputes with or financial or other difficulties at shipyards and suppliers;

 

   

changes to a particular customers’ specifications;

 

   

failure or delay in obtaining acceptance of a rig from a customer;

 

   

adverse weather conditions, such as the harsh environments found in certain parts of the North Sea or extreme weather conditions found from time to time in the U.S. Gulf of Mexico; and

 

   

inability or delay in obtaining flag-state, classification society, certificate of inspection, or regulatory approvals.

Significant cost overruns and/or delays have in the past and could in the future adversely affect the Maersk Drilling Group’s business, financial condition, and results of operations. Additionally, capital expenditures and deferred costs for upgrading and refurbishment projects, including any planned refurbishments, upgrades or conversions of the rigs, could exceed the Maersk Drilling Group’s planned capital expenditures. Failure to complete an upgrade, refurbishment, repair or conversion projects on time may, in some circumstances, result in the delay, renegotiation or cancellation of a drilling contract and could put at risk planned arrangements to commence operations on schedule. The Maersk Drilling Group could also be exposed to contractual penalties for failure to complete an upgrade, refurbishment or repair project and consequentially a failure to commence operations in a timely manner. Rigs undergoing upgrade, refurbishment or repairs generally do not earn a day rate during the period they are out of service. Failure by the Maersk Drilling Group to minimize lost day rates resulting from the immobilization of its rigs may materially adversely impact the Maersk Drilling Group’s business, financial condition, and results of operations.

There may be limits to the Maersk Drilling Group’s ability to mobilize rigs between geographic areas, and the duration, risks and associated costs of such mobilizations may be material to the Maersk Drilling Group’s business.

The offshore drilling industry is a global market as rigs can, depending on the technical capability of a rig to relocate and operate in various environments, as well as a rig’s regulatory compliance with local technical requirements, be moved from one area to another. However, mobilization of rigs is expensive and time-consuming and can be impacted by several factors including, but not limited to, governmental regulation and customs practices, availability of tugs and dry tow vessels, weather, currents, political instability, civil unrest, and military actions and rigs may as a result become stranded. Some jurisdictions, such as Norway, enforce strict technical requirements on the rigs, requiring substantial physical modification to the rigs before they can be utilized. Such modifications may require significant capital expenditures, and as a result, may limit the use of the rigs to those jurisdictions in the future. In addition, mobilization always caries the risk of damage to the rig. Failure to mobilize a rig in accordance with the deadlines set by a specific customer contract could result in a loss of compensation, liquidated damages or the cancellation or termination of the contract. In some cases, the Maersk Drilling Group may not be paid for the time that a rig is out of service during mobilization. In addition, in the hope of securing future contracts, the Maersk Drilling Group may choose to mobilize a rig to another geographic market without a customer contract in place. If no customer contracts are acquired, Maersk Drilling Group would be required to absorb these costs. Mobilization and relocating activities could therefore potentially have a material adverse effect on the Maersk Drilling Group’s business, financial condition, and results of operations.

Reactivation of stacked rigs is subject to risks, including delays and cost overruns, which could have an adverse impact on the Maersk Drilling Group’s available cash resources and results of operations.

As of December 31, 2021, the Maersk Drilling Group had one jack-up rig stacked in Denmark and one semi-submersible rig stacked in the Caspian Sea. The Maersk Drilling Group expects to reactivate those of its

 

49


Table of Contents

rigs that are currently stacked once those rigs are contracted and may consider reactivating additional rigs in anticipation of expected positive economic returns on such reactivation. Reactivation projects are subject to execution risks, including cost overruns or delays, which may adversely affect the Maersk Drilling Group’s business, financial condition, and results of operations. Capital expenditures and deferred costs for reactivation of stacked rigs could also exceed the Maersk Drilling Group’s planned capital expenditures. Failure to complete a reactivation on time may, in some circumstances, result in the delay, renegotiation or cancellation of a drilling contract and could put at risk planned arrangements to commence operations on schedule, exposing the Maersk Drilling Group to contractual penalties. A successful reactivation project could be impacted if incorrect or insufficient preservation processes were used during the stacking period, causing increased costs and/or delays for reactivation beyond that budgeted.

Physical infrastructure and logistics systems in some of the areas where the Maersk Drilling Group operates are underdeveloped.

Physical infrastructure and logistics systems, such as roads, air transport facilities and lines of communication, in certain areas of the world where the Maersk Drilling Group operates, are under developed and may not have been adequately funded and maintained. For example, the Maersk Drilling Group operates in certain areas that are concurrently developing infrastructure around the oil and gas industry, such as West Africa, and such infrastructure is not always fully developed at the time that the Maersk Drilling Group is operating in the region. This may have an effect on the efficiency and safety of the Maersk Drilling Group’s operations in these regions due to reduced efficiency, predictability, reliability, and safety in the transportation of equipment and personnel. Breakdowns or failures of any part of the physical infrastructure or logistics systems in the areas where the Maersk Drilling Group operates may disrupt the Maersk Drilling Group’s normal business activities, cause the Maersk Drilling Group to suspend operations, or make Maersk Drilling Group operations impossible. Such circumstances, or any further deterioration of the physical infrastructure in the areas where the Maersk Drilling Group operates, may increase the costs of doing business and interrupt business operations, any or all of which could have a material adverse effect on the Maersk Drilling Group’s business, financial condition, and results of operations. In addition, as many new areas for drilling for oil and natural gas are made in areas of the world that may still be developing the relevant infrastructure, the Maersk Drilling Group’s exposure to this risk may increase in the future.

The Maersk Drilling Group’s business, financial condition, and results of operations may be adversely affected if it does not make accurate assumptions and estimates when tendering for new drilling contracts.

The Maersk Drilling Group must make certain assumptions and estimates when it tenders for new contracts, as well as identify key issues and risks (including, but not limited to, the degree of complexity of the project assumptions regarding rig efficiency or utilization of equipment, HSSE performance requirements, operational expenses, mobilization costs, tax payments, availability of skilled personnel and availability of critical equipment with long lead times). Assumptions are particularly necessary when tendering for a new client or entering new product or geographic markets. Even when a risk is properly identified, the Maersk Drilling Group may be unable to or may not accurately quantify it. Unforeseen or unanticipated risks and incorrect assumptions when bidding for a contract may lead to increased costs and/or loss of revenue for the Maersk Drilling Group and could adversely affect its business, financial condition, and results of operations.

The Maersk Drilling Group is exposed to the credit risks of key customers and certain other third parties.

The Maersk Drilling Group is subject to risks of loss resulting from the non-payment or non-performance by third parties of their obligations. Although the Maersk Drilling Group monitors and manages counterparty risks, some of the Maersk Drilling Group’s customers and other parties may be highly leveraged and subject to their own operating, financial and regulatory risks. For example, some of the Maersk Drilling Group’s contractual counterparts are special purpose vehicles created for the purpose of carrying out a specific offshore oil and gas project. These special purpose vehicles typically have limited assets or capital, and the Maersk Drilling Group is

 

50


Table of Contents

not always able to obtain parent or third-party performance or financial guarantees for such counterparts’ obligations. During more challenging market environments, the Maersk Drilling Group will be subject to an increased risk of customers seeking to repudiate contracts. The ability of the Maersk Drilling Group’s customers to perform their contractual obligations may also be adversely affected by restricted credit markets and economic downturns. Any bankruptcy, insolvency or inability by the Maersk Drilling Group’s customers to settle their debts or honor their obligations to the Maersk Drilling Group when they fall due may adversely affect the Maersk Drilling Group’s business, financial condition, and results of operations.

The Maersk Drilling Group may also have considerable risk in relation to joint-venture partners and other parties with whom the Maersk Drilling Group does and will collaborate with, in particular related to the possible non-performance of such parties of their obligation towards the Maersk Drilling Group. See “—The Maersk Drilling Group faces risks associated with joint ventures and investments in associates”.

The Maersk Drilling Group’s labor costs and related operating costs could increase as a result of a number of factors.

A number of factors could increase the Maersk Drilling Group’s labor costs and potentially affect other costs of operations. For example, during historic periods of high growth within the industry, the cost of qualified personnel and equipment has increased dramatically. Even during periods of low growth within the industry, personnel and operating costs related to specific operations may increase as a result of increasingly-stringent local content requirements, which require personnel, services, and equipment to be sourced from the local jurisdiction (see also “—The Maersk Drilling Group is subject to complex laws and regulations in various jurisdictions that can adversely affect the cost, manner or feasibility of conducting its business”).

Although the Maersk Drilling Group’s longer term contracts (those over 12 months in length) with customers typically include price escalation clauses, which establish agreed annual rate increases typically linked to a relevant index to cover the Maersk Drilling Group’s increased costs, there can be no assurance that such clauses will be sufficient to fully compensate the Maersk Drilling Group for higher personnel expenses or related operational costs. Further, certain countries where the Maersk Drilling Group operates may lack a suitable price escalation index, which makes it difficult for the Maersk Drilling Group to negotiate an acceptable escalation clause. Additional labor and related operating costs could have a material adverse effect on the Maersk Drilling Group’s business, financial condition, and results of operations.

The Maersk Drilling Group’s operating and maintenance costs will not necessarily fluctuate in proportion to changes in operating revenues.

The majority of Maersk Drilling’s operating revenues are derived from day rates which are subject to fluctuations depending on external factors that include, but are not limited to, the general level of oil and gas prices and the demand and supply of drilling rigs. The same cannot be said for the Maersk Drilling Group’s operating and maintenance costs which are largely fixed in nature. Since record high day rates in 2014, day rates included in new contracts for Maersk Drilling Group’s drilling rigs have declined. In response, the Maersk Drilling Group has implemented cost reductions, however operating and maintenance costs have not declined in line with day rates during the same period. From 2017 into 2020, gradual improvements in day rates were observed, reflecting an upturn in the general market. In March 2020, in conjunction with the spread of a global pandemic, day rates and demand for drilling rigs fell to all-time lows. Since then, in the backdrop of the strongest oil price since 2014, demand for drilling rigs has rebounded and day rates have seen meaningful recoveries, although they still remain below levels observed in 2014. In a situation where a drilling rig faces longer idle periods, reductions in costs may not be immediate as some of the crew may be required to prepare drilling rigs for the idle period and the Maersk Drilling Group may not be able to successfully redeploy crew members who are not required to maintain the drilling rig. Accordingly, there can be no assurance that the Maersk Drilling Group will be successful in reducing its costs proportionately under circumstances where its revenues may also have decreased. To the extent that changes in the Maersk Drilling Group’s operating and maintenance costs are

 

51


Table of Contents

not proportionate to changes in operating revenues there may be a material adverse effect on the Maersk Drilling Group’s business, financial condition, and results of operations.

The Maersk Drilling Group may not be able to keep pace with a significant step-change in technological development.

The market for the Maersk Drilling Group’s services is affected by significant technological developments that have resulted in, and will likely continue to result in, substantial improvements in equipment functions and performance throughout the industry. As a result, the Maersk Drilling Group’s future success and profitability will be dependent in part upon its ability to:

 

   

improve existing services, rigs and rental equipment;

 

   

address the increasingly sophisticated needs of its customers;

 

   

anticipate major changes in technology and industry standards and respond to technological developments on a timely basis.

If the Maersk Drilling Group is not successful in acquiring new equipment or upgrading its existing drilling rigs, rental equipment, or the technical skill set of its employees on a timely and cost-effective basis in response to technological developments or changes in industry standards, or if a significant step-change in technology provides an alternative method for drilling, this could have a material adverse effect on the Maersk Drilling Group’s business, financial condition, and results of operations.

The Maersk Drilling Group’s success depends to a large extent on IT systems, and the occurrence of an attack or other IT systems incident or break down could result in operational disruption, theft or data corruption and could cause financial or reputational harm to the Maersk Drilling Group.

The Maersk Drilling Group’s ability to timely and correctly obtain, process and transmit data related to its operations and products is critical to the effective management of its business. A breakdown of or disruption to any of the Maersk Drilling Group’s IT systems could materially impact its relationships with customers, its reputation and its operating costs and margins.

As dependence on digital technologies has increased, cyber incidents, including deliberate attacks or unintentional events, have also increased. A cyberattack could include gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data or causing operational disruptions and denial-of-service. In June 2017, A.P. Moller Maersk A/S and its consolidated subsidiaries (together, the “Maersk Group”), and many other firms and organizations in Europe and the United States, experienced a malicious ransomware-based cyberattack which resulted in significant and extended disruptions to critical IT systems and infrastructure. As a part of the Maersk Group at the time, the Maersk Drilling Group relied on certain of the Maersk Group’s IT systems. The cyberattack resulted in an effective lock down of infected computers on the Maersk Group’s network, with files and documents on affected systems involuntarily encrypted and rendered inaccessible. The cyberattack significantly limited computer access on the administrative side of the Maersk Drilling Group’s IT systems and infrastructure. However, due to information security counter-measures, the Maersk Drilling Group’s operations were unaffected by the cyberattack.

The Maersk Drilling Group’s technologies, systems and networks, and those of third parties on which the Maersk Drilling Group relies, could be the target of future cyberattacks or information security breaches. Any such event could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of proprietary and other information, or other disruption to the Maersk Drilling Group’s business and operations. In addition, certain cyber incidents, such as surveillance, could remain undetected for an extended period of time. There can be no assurance that the Maersk Drilling Group will not be the target of cyberattacks in the future or suffer losses related to any such cyber incident.

 

52


Table of Contents

Such attacks could lead to IT systems downtime, loss of access to business applications, inability to meet legal, regulatory or contractual requirements, loss of business information and/or intellectual property through destruction or theft and adversely impact production networks and production capabilities. If the Maersk Drilling Group is not successful in achieving additional operational efficiencies and enhanced IT security through ongoing maintenance, improvement and development of its IT systems, its ability to maintain operational efficiencies and cost structure relative to its competitors and to defend against such cyber incidents could deteriorate, which could have a material adverse effect on the Maersk Drilling Group’s business, financial condition, and results of operations.

The Maersk Drilling Group has engaged in divestments that may subject it to associated risks and liabilities.

The Maersk Drilling Group has provided, and may in the future provide, certain representations, warranties and indemnities in connection with the businesses it sells. For example in connection with the divestment of Maersk Inspirer in 2021 to Havila Sirius and the sale of the jack-ups Maersk Guardian and Maersk Gallant to New Fortress Energy in the first half of 2021, Maersk Drilling provided certain standard representations and warranties to the respective buyers. As a result, the Maersk Drilling Group may be subject to the risk of liability for breach of representations and warranties and/or indemnity obligations in favor of the respective buyers. While the Maersk Drilling Group does not currently believe there will be any material claims under the representations, warranties and indemnities it has provided, it is possible that claims could be made against the Maersk Drilling Group in the future. If such a claim or claims were successful, it could have a material adverse effect on the Maersk Drilling Group’s results of operations, cash flows and financial position.

The Maersk Drilling Group faces risks associated with joint ventures and investments in associates.

The Maersk Drilling Group has made investments in joint ventures and associates. Such investments are often entered into to satisfy local requirements in certain jurisdictions and the terms of the investment agreements vary depending on the counterparty and jurisdiction involved. For example, the Maersk Drilling Group enters into joint ventures with local partners in the ordinary course of business to satisfy local content requirements in certain African countries in which it operates. Additionally, in April 2018, Maersk Drilling entered a joint venture agreement with Maersk Supply Service A/S to establish Maersk Decom A/S, for the purpose of providing bundled decommissioning solutions to global oil and natural gas operators.

Investments in joint ventures or associates over which the Maersk Drilling Group has partial or joint control are subject to the risk that the other shareholders of the joint venture or associate, who may have different business or investment strategies than the Maersk Drilling Group or with whom the Maersk Drilling Group may have a disagreement or dispute, may have the ability to block business, financial, or management decisions (such as the decision to distribute dividends or appoint members of management) which may be crucial to the success of the Maersk Drilling Group’s investment in the joint venture or associate, or could otherwise implement initiatives which may be contrary to the Maersk Drilling Group’s interests. The Maersk Drilling Group’s partners may be unable, or unwilling, to fulfil their obligations under the relevant shareholder agreements (for example by non-contributing working capital or other resources), or may experience financial, operational, or other difficulties that may adversely impact the Maersk Drilling Group’s investment in a particular joint venture or associate. In addition, the Maersk Drilling Group’s partners may lack sufficient controls and procedures which could expose the Maersk Drilling Group to risk. If any of the foregoing were to occur, such occurrence could have a material adverse effect on the Maersk Drilling Group’s business, financial condition, and results of operations.

Financial Risks Relating to the Maersk Drilling Group

The Maersk Drilling Group operates in a capital-intensive industry and its future sources of financing are not necessarily secured.

The Maersk Drilling Group operates in a capital-intensive industry and thus may have substantial capital needs in order to be able to cover its obligations in connection with maintaining its fleet of drilling rigs and any potential future growth strategies.

 

53


Table of Contents

The Maersk Drilling Group finances its capital expenditures through a combination of operating cash flow and debt financing. It is not certain that the Maersk Drilling Group will generate enough free cash flow to enable it to cover all its financing needs without resorting to debt financing or that its capital expenditures and other investments will yield the returns that it anticipates. The Maersk Drilling Group has an undrawn revolving credit facility (the “Revolving Credit Facility”) in an aggregate principal amount of $400,000,000. Although it is expected that the Revolving Credit Facility will provide the Maersk Drilling Group with sufficient liquidity in case of potential downside scenarios, the available amount under the facility may not sufficiently cover the needs of the Maersk Drilling Group in situations where risk factors relating to, inter alia, idle periods, lower rates, lower payments for downtime, project cost overruns and cost increases materialize in a manner not foreseen and catered for by the Maersk Drilling Group. Moreover, it may not be possible, irrespective of the general level of interest rates, to obtain additional required debt financing or it may only be possible to do so with difficulty, with delay or at unfavorable commercial terms.

If the Maersk Drilling Group’s degree of leverage is too high, it could become more vulnerable in the event of a downturn in business or the economy generally. In addition, if the Maersk Drilling Group is unable to comply with the restrictions and the financial covenants in the Maersk Drilling Facilities Agreements or any future agreement governing its indebtedness, there could be a default under the terms of these agreements, which could result in an acceleration of repayment of funds that have been borrowed.

The Maersk Drilling Group has incurred, and may in the future incur, significant amounts of debt. As of December 31, 2021, the Maersk Drilling Group had total outstanding interest-bearing debt with a carrying amount of $1.05 billion. The Maersk Drilling Group’s degree of leverage could make it more vulnerable to a downturn in business or the economy generally. The Maersk Drilling Group could default on its debt service obligations, or, if it becomes more leveraged in the future, the resulting increase in debt service requirements could cause it to default on its obligations, any of which could have a material adverse effect on the Maersk Drilling Group’s business, financial condition, and results of operations.

If the Maersk Drilling Group is unable to comply with the restrictions and covenants in the Syndicated Facilities Agreement, the DSF Facility Agreement (as defined below) or any other future debt financing agreements, there could be a default or cancellation under the terms of those agreements and lenders could terminate their commitments to lend or accelerate the outstanding loans and declare all amounts borrowed due and payable. The Maersk Drilling Group’s ability to comply with these restrictions and covenants, including meeting financial ratios and measures, is dependent on its future performance. See “Business of Maersk Drilling and Certain Information About Maersk DrillingLiabilities and Indebtedness” for further information on the restrictions and covenants in the Syndicated Facilities Agreement and the DSF Facility Agreement. Borrowings under debt arrangements that contain cross-acceleration or cross-default provisions may also be accelerated and become due and payable. In addition, each of the Syndicated Facilities Agreement and the DSF Facility Agreement include change of control provisions. If either of such change of control provisions is triggered, it could result in Maersk Drilling having to immediately prepay all amounts, including interest, accrued and owing under the facilities made available pursuant to the Syndicated Facilities Agreement and the DSF Facility Agreement, respectively. Moreover, the DSF Facility Agreement includes, with effect from, and subject to the occurrence of, the date of completion of the Offer, a provision to the effect that if APMH ceases to be represented on the Topco Board, this could result in the Maersk Drilling Group having to immediately prepay all amounts, including interest, accrued and owing under the facility made available pursuant to the DSF Facility Agreement.

In addition, the Syndicated Facilities are secured, as of the date hereof, by (i) first priority mortgages on the Syndicated Collateral Rigs, (ii) first priority assignment of insurance of the Syndicated Collateral Rigs, (iii) first priority pledge of certain bank accounts, (iv) first priority share pledge in the group members being owners of the Syndicated Collateral Rigs and certain material intra-group charterers in respect of the Syndicated Collateral Rigs and (v) subordination of certain intra-group loans. In certain circumstances, earnings in respect of employment contracts for the Syndicated Collateral Rigs will be assigned in favor of the lenders under the Syndicated

 

54


Table of Contents

Facilities Agreement. The DSF Facility is secured by certain liens, including a first priority mortgage on the DSF Collateral Rigs. See “Business of Maersk Drilling and Certain Information About Maersk DrillingLiabilities and Indebtedness” for further information on the security granted by the Maersk Drilling Group in respect of the DSF Facility.

Accordingly, the Maersk Drilling Group’s degree of leverage, restrictive covenants in the Syndicated Facilities Agreement and the DSF Facility Agreement, respectively, or the fact that the majority of the Maersk Drilling Group’s existing assets have been pledged in favor of existing lenders could affect its ability to obtain additional financing for working capital, capital expenditures, acquisitions, development or other general corporate purposes.

If any of these events occur, the Maersk Drilling Group cannot guarantee that its assets will be sufficient to repay in full all of its outstanding indebtedness, and the Maersk Drilling Group may be unable to find alternative financing. Even if the Maersk Drilling Group could obtain alternative financing, that financing might not be on terms that are favorable or acceptable. The occurrence of such events may have a material adverse effect on the Maersk Drilling Group’s business, financial condition, and results of operations.

The Maersk Drilling Group’s results are affected by fluctuations in foreign exchange rates.

The Maersk Drilling Group’s income is primarily denominated in U.S. dollars, while the related expenses are incurred in a wide range of currencies, including U.S. dollars, Danish krone, pounds sterling, Australian dollars and Norwegian kroner. In order to manage foreign exchange rate exposure related to costs incurred in local currency, the Maersk Drilling Group has implemented a long-term hedging strategy, whereby costs associated with its head office in Denmark are hedged with financial transactions while in other jurisdictions the hedging strategy is to enter into customer contracts where an element of the contract value is in the local currency of the relevant jurisdiction to match, or hedge part of, the local costs.

There are complexities inherent in determining whether and when foreign currency exposure of the Maersk Drilling Group will materialize. The Maersk Drilling Group may also have difficulty in fully implementing its hedging strategy if its hedging counterparties are unwilling to increase derivative risk limits with it, and the Maersk Drilling Group is also exposed to the risk of non-performance or default by these hedging counterparties. The exchange rates at which the Maersk Drilling Group is able to hedge its foreign currency exposure may also deteriorate. Accordingly, its foreign currency hedging strategy may not protect it from significant changes in the exchange rate of the U.S. dollar to other currencies, in particular over the long term, which could have a negative effect on the Maersk Drilling Group’s results of operation and financial condition. In addition, in accordance with its hedging strategy, the Maersk Drilling Group estimates its local currency costs in order to hedge the local currency element of its non-U.S. dollar-denominated contracts and to the extent that any portion of such costs is not hedged, the Maersk Drilling Group will be exposed to changes in exchange rates, which may be significant. Failure to manage this cost/price exposure could have an effect on the Maersk Drilling Group’s business, financial condition, and results of operations. In addition to the foreign currency exposure that the Maersk Drilling Group faces in its operations, certain jurisdictions in which the Maersk Drilling Group operates may from time to time impose restrictions on the movement of cash thereby limiting the Maersk Drilling Group’s ability to move money from the local jurisdiction. Any such restrictions could have an adverse effect on the Maersk Drilling Group’s business, financial condition, and results of operations.

The Maersk Drilling Group is exposed to risks relating to interest rate fluctuations.

The facility made available under the DSF Facility Agreement and the majority of the facilities made available under the Syndicated Facilities Agreement have floating interest rates. In order to manage the Maersk Drilling Group’s exposure to interest rate fluctuations, the Maersk Drilling Group targets to have a portion of its gross debt at fixed interest rates either directly or through interest rate swaps over the duration of the Syndicated Facility.

 

55


Table of Contents

If the Maersk Drilling Group is unable to effectively manage its interest rate exposure, any increase in market interest rates would increase the Maersk Drilling Group’s interest rate exposure, debt service obligations, earnings and cash flow. Such changes in interest rates could also have a material adverse effect on the Maersk Drilling Group’s business, financial condition, and results of operations.

Legal and Regulatory Risks Relating to the Maersk Drilling Group

The Maersk Drilling Group is subject to complex laws and regulations in various jurisdictions that can adversely affect the cost, manner or feasibility of conducting its business.

The Maersk Drilling Group operates globally across multiple jurisdictions and is subject to numerous laws and regulations in the jurisdictions in which it operates, covering a variety of areas, including:

 

   

oil and natural gas exploration and development;

 

   

the equipment requirements for, and operation of, drilling rigs, and provision of well services;

 

   

customs duties on the importation of drilling rigs and equipment;

 

   

protection of the environment (see also “—The Maersk Drilling Group may be subject to liability under multifaceted environmental laws and regulations and contractual environmental liability, which could have a material adverse effect on the Maersk Drilling Group’s business, financial condition, and results of operations.”);

 

   

taxation of offshore earnings and the earnings of expatriate personnel (see also “—The complexity and continued development of local and international tax rules and interpretation thereof and the complexity of the Maersk Drilling Group’s business, together with increased political and public focus on multinational companies’ tax payments, may expose the Maersk Drilling Group to financial and reputational risks.”);

 

   

repatriation of foreign earnings;

 

   

HSSE performance requirements;

 

   

the employment and compensation of local employees; and

 

   

the use of local suppliers, contractors, representatives and/or agents by the Maersk Drilling Group.

In addition, some foreign governments favor or require: (i) the awarding of drilling contracts to contractors wholly or partially owned by their own citizens; (ii) the partial or complete ownership of drilling rigs and/or equipment by their own citizens; (iii) the local registration of companies or branches; (iv) the use of a local representative/agent; (v) the purchase of goods or services from local suppliers; (vi) ministerial or central bank approval for payments in a currency other than the local currency and/or (vii) the employment of their own citizens. These practices, known as “local content requirements”, may, to the extent that there is a limited supply of local suppliers, partners and contractors qualified for the Maersk Drilling Group’s services, materially adversely affect the Maersk Drilling Group’s ability to compete or to operate in those regions as well as the Maersk Drilling Group’s costs and ultimately its business, financial condition, and results of operations. To the extent local content requirements are only discovered or confirmed after operations have commenced, the Maersk Drilling Group may be restricted from receiving payments for its drilling services, incur substantial costs and may ultimately be required to cease operations in the local jurisdiction. Further, it is difficult to predict what laws or regulations may be enacted in the future or how the local authorities’ implementation, interpretation, or enforcement of such regulations could adversely affect the global drilling industry and the Maersk Drilling Group’s business.

Applicable laws and regulations can significantly affect the ownership and operation of the Maersk Drilling Group’s rigs, and failure to comply may subject the Maersk Drilling Group to exclusion from the relevant market, loss of future and existing contracts, and criminal sanctions or administrative or civil remedies, including

 

56


Table of Contents

fines, denial of export privileges, injunctions, or seizures of assets. While the Maersk Drilling Group maintains policies designed to comply with various foreign laws and regulations, it may not be possible for the Maersk Drilling Group to detect or prevent every violation in every jurisdiction in which its employees, agents, subcontractors or joint venture partners are located. Should such a violation occur, the Maersk Drilling Group or its directors, officers, and employees may therefore be subject to civil and criminal penalties and to reputational damage.

The Maersk Drilling Group may be subject to liability under multifaceted environmental laws and regulations and contractual environmental liability, which could have a material adverse effect on the Maersk Drilling Group’s business, financial condition, and results of operations.

The Maersk Drilling Group’s operations are subject to a variety of laws, regulations, and requirements in multiple jurisdictions controlling the discharge of various materials into the environment (including petroleum products, asbestos, polychlorinated biphenyls and other substances that may be present at, or released or emitted from, the Maersk Drilling Group’s operations), requiring removal and clean-up of materials that may harm the environment, controlling carbon dioxide emissions, or otherwise relating to the protection of the environment. Such laws, regulations and requirements vary from jurisdiction to jurisdiction. The application of these requirements or the adoption of new requirements could have a material adverse effect on the Maersk Drilling Group’s business, financial condition, and results of operations.

In general, the laws and regulations protecting the environment are becoming increasingly numerous, stringent, and complex. For example, the Maersk Drilling Group is subject to U.S. regulations (such as the Clean Water Act, and other regulations administered by the U.S. Coast Guard, the Environmental Protection Agency, and the Bureau of Safety and Environmental Enforcement), UK regulations (such as the requirement to have an Oil Pollution Emergency Plan pursuant to the Offshore Safety Directive), and other national and international regulations (such as the requirement to have a Shipboard Oil Pollution Emergency Plan (“SOPEP”) pursuant to the International Maritime Organization). The Maersk Drilling Group incurs, and expects to continue to incur, significant capital and operating costs to comply with applicable environmental laws and regulations.

A failure to comply with applicable environmental laws and regulations, or to obtain or maintain necessary environmental permits or approvals, or a non-compliant release of oil or other hazardous substances in connection with the Maersk Drilling Group’s operations could subject the Maersk Drilling Group to significant administrative and civil fines and penalties, criminal liability, remediation costs for natural resource damages, third-party damages, and material adverse publicity, or may result in the suspension or termination of its operations. Some laws may expose the Maersk Drilling Group to liability for the conduct of, or conditions caused by, third parties (including customers and subcontractors), or for acts that were in compliance with all applicable laws at the time they were performed. Further, some of these laws and regulations may impose direct and strict liability, rendering a company or a person liable for environmental damage without regard to negligence. The Maersk Drilling Group is required to satisfy insurance and financial responsibility requirements for potential oil (including marine fuel) spills and other pollution incidents and the insurance may not be sufficient to cover all such risks and may at times become materially more costly to acquire.

The Maersk Drilling Group has generally been able to obtain some degree of contractual indemnification pursuant to which its customers agree to hold harmless and indemnify the Maersk Drilling Group against liability for pollution, well and environmental damage. However, generally in the oil and natural gas services industry there is increasing pressure from customers to pass on a larger portion of the liabilities to contractors, such as the Maersk Drilling Group, as part of their risk management policies. Further, there can be no assurance that the Maersk Drilling Group can obtain indemnities in its contracts or that, in the event of extensive pollution and environmental damage, its customers would have the financial capability to fulfil their contractual obligations. Further, such indemnities may be deemed legally unenforceable based on relevant law, including as a result of public policy.

Finally, if a major industry incident, such as the blowout of the Macondo well in the U.S. Gulf of Mexico in 2010, was to occur again, this could lead to a regulatory response which may result in further increased operating

 

57


Table of Contents

costs and exposures. The Maersk Drilling Group cannot predict with any certainty what further impact, if any, future serious incidents may have on the regulation of offshore oil and natural gas exploration and development activity and the cost and availability of insurance coverage to cover the risks of such activities. The enactment of new or stricter regulations in the United States and other countries and increased liability for companies operating in this sector plus increased cost or unavailability of insurance could adversely affect the Maersk Drilling Group’s operations.

Regulation of greenhouse gases (“GHGs”) and climate change related legislation, global decarbonization, and changes in the availability of financing for fossil fuel companies could have a negative impact on the Maersk Drilling Group’s business, financial condition, and results of operations.

Governments around the world are increasingly focused on enacting laws and regulations regarding climate change and regulation of greenhouse gases. Lawmakers and regulators in the jurisdictions where the Maersk Drilling Group operates have proposed or enacted regulations requiring reporting of greenhouse gas emissions and the restriction thereof. In addition, efforts have been made and continue to be made in the international community toward the adoption of international treaties or protocols that would address global climate change issues and impose reductions of hydrocarbon-based fuels, and encouraging the implementation of net-zero greenhouse gas emission pledges. The Norwegian government, for example, has declared that its goal is to achieve net-zero greenhouse gas emissions by 2030; to achieve that goal, Norway’s oil and gas producers may be required to lower their carbon output or purchase carbon credits to offset their emissions, which could unfavorably impact the Maersk Drilling Group’s customers and, in turn, the Maersk Drilling Group’s business. Laws or regulations incentivizing or mandating the use of alternative energy sources such as wind power and solar energy have also been enacted in certain jurisdictions. Numerous large cities globally and a few countries have mandated conversion from internal combustion engine-powered vehicles to electric-powered vehicles and placed restrictions on non-public transportation. Fuel conservation measures, alternative fuel requirements and increasing consumer demand for alternatives to oil could reduce demand for oil. These measures are aimed at reducing reliance on and future demand for oil, which could have a material impact on the Maersk Drilling Group’s business.

In recent years, federal, state and local governments have taken steps to reduce emissions of GHGs and encourage decarbonization. The EPA has finalized a series of GHG monitoring, reporting and emissions control rules, and the U.S. Congress has, from time to time, considered adopting legislation to reduce emissions. Several states have already taken measures to reduce emissions of GHGs primarily through the development of GHG emission inventories or regional GHG cap-and-trade programs. While we are subject to certain federal GHG monitoring and reporting requirements, our operations currently are not adversely impacted by existing federal, state and local climate change initiatives. Although Congress previously considered but did not adopt proposed legislation aimed at reducing GHG emissions, recent Congressional resolutions and the new Democratic majority in both the Senate and House of Representatives make it likely Congress will soon consider new legislation requiring decarbonization or use of renewable energy in much higher proportions. The likelihood of such legislation has increased due to the current administration. Recently, several states and local jurisdictions have pledged to remove internal combustion engines from their roads as early as 2035. Consequently, legislation and regulatory programs to reduce GHG emissions could have an adverse effect on our business, financial condition and results of operations.

Such environmental, social and governance (“ESG”) activism and initiatives aimed at limiting climate change and reducing air pollution could impact our business activities, operations and ability to access capital. Furthermore, some parties have initiated public nuisance claims under federal or state common law against certain companies involved in the production of oil. As a result, private individuals or public entities may seek to enforce environmental laws and regulations against us and could allege personal injury, property damages or other liabilities. Although our business is not a party to any such litigation, we could be named in actions making similar allegations. An unfavorable ruling in any such case could significantly impact our operations and could have an adverse impact on our financial condition.

 

58


Table of Contents

Laws, regulations, treaties, and international agreements related to greenhouse gases and climate change may unfavorably impact the Maersk Drilling Group’s business, its suppliers, and its customers, may result in increased compliance costs and operating restrictions, restrict the Maersk Drilling Group’s access to debt and equity capital or its ability to secure insurance coverage, and could reduce drilling in the offshore oil and natural gas industry generally, all of which would have a material adverse impact on the Maersk Drilling Group’s business, financial condition, and results of operations.

Finally, most scientists have concluded that increasing concentrations of GHGs in the Earth’s atmosphere and climate change may produce significant physical effects on weather conditions, such as increased frequency and severity of droughts, storms, floods and other climatic events. If any such effects were to occur, they could adversely affect or delay demand for the oil or natural gas produced or cause us to incur significant costs in preparing for or responding to the effects of climatic events themselves. Potential adverse effects could include disruption of our production activities, including, for example, damages to our facilities from winds or floods, increases in our costs of operation or reductions in the efficiency of our operations, impacts on our personnel, supply chain, or distribution chain, as well as potentially increased costs for insurance coverages in the aftermath of such effects. Our ability to mitigate the adverse physical impacts of climate change depends in part upon our disaster preparedness and response and business continuity planning.

The Maersk Drilling Group operates globally across multiple jurisdictions, and is thereby exposed to a number of risks inherent in international operations, including political, civil, or economic disturbance.

The Maersk Drilling Group currently operates globally across multiple jurisdictions and may operate in additional countries in the future, thereby exposing it to risks that are inherent to conducting international operations, some of which are due to factors beyond the Maersk Drilling Group’s control, including:

 

   

terrorist acts, war, civil disturbances and military actions;

 

   

seizure, nationalization or expropriation of property or equipment;

 

   

political unrest or revolutions;

 

   

acts of piracy, which have historically affected ocean-going vessels (as may be found when Maersk Drilling operates in certain parts of Africa);

 

   

actions by environmental organizations;

 

   

public health threats (such as the recent and ongoing COVID-19 pandemic);

 

   

the inability to repatriate income or capital;

 

   

complications associated with repairing and replacing equipment in remote locations (such as in certain areas of the North Sea harsh environment);

 

   

delays or difficulties in obtaining necessary visas and work permits for its employees (as employees may be relocated from time to time);

 

   

wage and price controls imposed by the relevant authorities; and

 

   

imposition of trade barriers, moratoriums or sanctions and other forms of government regulation and economic conditions.

Some of these risks could result in events that limit or disrupt the Maersk Drilling Group’s operations (for example, by requiring or resulting in evacuation of personnel, cancellation of contracts, or the loss of personnel or assets), impose practical or legal barriers to the Maersk Drilling Group’s continued operations, or negatively impact the profitability of those operations, and could therefore have a material adverse effect on the Maersk Drilling Group’s business, financial condition, and results of operations. For example, the United States government has initiated or is considering imposing tariffs on certain imports and/or trade counterparties,

 

59


Table of Contents

including China, and certain foreign governments, including China, have initiated or are considering imposing retaliatory tariffs on certain United States goods. A global trade disruption, whether as the result of a prolonged “trade war” or some other reason, could result in changes to the cost of oil or other goods, impacting E&P Companies’ demand for drilling services.

If the Maersk Drilling Group or its customers are unable to acquire or renew permits and approvals required for drilling operations or are unable to comply with regulations required to maintain such permits and approvals, the Maersk Drilling Group may be forced to suspend or cease its operations, and its profitability may be reduced.

Crude oil and natural gas exploration and production operations require numerous permits and approvals for the Maersk Drilling Group and its customers from governmental agencies in the areas in which it operates. Many governmental agencies have increased regulatory oversight and permitting requirements in recent years. If the Maersk Drilling Group or its customers are not able to obtain necessary permits and approvals in a timely manner, the Maersk Drilling Group’s operations will be adversely affected. Obtaining all necessary permits and approvals may necessitate substantial expenditures to comply with the requirements of these permits and approvals. Future changes to these permits or approvals or any adverse change in the interpretation of existing permits and approvals could result in further unexpected, substantial expenditures. Such regulatory requirements and restrictions could also delay or curtail the Maersk Drilling Group’s operations, require it to make substantial expenditures to meet compliance requirements, and could have a material impact on its business, financial condition, and results of operations and may create a risk of expensive delays or loss of value if a project is unable to function as planned.

In addition, the Maersk Drilling Group is subject from time to time to audits by regulators who assess conformity with regulations. For example, in 2018, the Petroleum Safety Authority Norway (“PSA”) conducted such an audit of the Maersk Drilling Group, together with other operators in the industry, to determine how they have established, verified and maintained the barrier function for evacuation to sea on all their units which hold an Acknowledgement of Compliance (“AoC”). Following a finding of deficiencies, the Maersk Drilling Group received an order from the PSA to (i) establish performance requirements for the specific technical, operational or organizational barrier elements required to ensure that the individual barrier is effective, know which barriers and barrier elements are non-functioning or weakened and (iii) initiate necessary measures for correcting or compensating for deficient or weakened barriers. In response to this, the Maersk Drilling Group initiated and imposed corrective measures to comply with the order. Failure to adequately comply with orders received from regulators could result in the requirement for further substantial expenditures, the imposition of operational restrictions on the Maersk Drilling Group and, potentially, the loss of required permits or approvals, all of which could have a material adverse effect on the Maersk Drilling Group’s business, financial condition, and results of operations.

The complexity and continued development of local and international tax rules and interpretation thereof and the complexity of the Maersk Drilling Group’s business, together with increased political and public focus on multinational companies’ tax payments, may expose the Maersk Drilling Group to financial and reputational risks.

The Maersk Drilling Group operates in multiple jurisdictions, which entails an inherent tax risk, with respect to corporate taxes, value added taxes and excise duties, as well as withholding taxes and taxes regarding specific rig taxation, and allocation between jurisdictions hereof.

Most of the Maersk Drilling Group’s operations are subject to potential changes in tax regimes in a similar manner as other companies in the industry. General changes to applicable tax laws and regulations at the national level, or changes to the interpretation of existing rules or case law, could adversely affect the Maersk Drilling Group’s business, financial condition, and results of operations. The Maersk Drilling Group’s business requires it to make significant long-term capital expenditures and commitments on the basis of forecasts, including forecasts

 

60


Table of Contents

of potential tax liabilities. Changes in tax regimes or changes to interpretation of existing rules may have a detrimental effect on the business cases for certain long-term investments.

As tax laws are complex and subject to interpretation, there is a risk that the Maersk Drilling Group may not be able to maintain a position as expressed in a tax return following the filing of such tax return. The Maersk Drilling Group recognizes provisions in its financial statements for known and material tax risks based on the assessed probability of such risks materializing. As a result, such provisions are generally lower than the potential maximum risks. If unknown tax risks were to materialize, this could result in a material amount of taxes payable, penalties, and interests. Any payment of taxes exceeding the amount recognized in provisions could negatively affect the Maersk Drilling Group’s cash flows and financial results.

As a result of the Maersk Drilling Group being a multi-jurisdiction business with assets owned in different jurisdictions, it is subject to complex and subjective transfer pricing rules. The Maersk Drilling Group takes part in a significant number of intercompany transactions on a yearly basis, which includes transactions in and across different tax regimes. Such transactions must be carried out at arm’s length to comply with local transfer pricing rules and the international standards set out by the OECD. The high number of transactions and the complexity of the business, together with compliance requirements, may cause non-compliance with transfer pricing rules. Any non-compliance could result in material tax expenses, interests and/or penalties, and in some instances, double taxation. Double taxation is, in particular, a risk when operating in countries outside the European Union.

The Maersk Drilling Group operates in several different value added tax or excise duty regimes and has taken part in a number of highly complex international and local transactions. The high number of transactions and the complexity of the business, together with compliance requirements, may cause non-compliance with value-added tax and excise duty rules. Any non-compliance could result in material tax expenses, interests and/or penalties.

The Maersk Drilling Group’s effective tax rate is impacted by the mix of income earned in different countries and the related corporate tax rate, as well as withholding taxes upon repatriation of profit locally. Local tax rules, interpretation of tax rules and case law in different jurisdictions change over time, and may be implemented with retroactive effect. Interest limitation rules may affect the ability to claim tax deductions for external and internal financial costs thus also increasing the effective tax rate. Changes in local tax legislation could impact the effective tax rate, as well as impose a risk of breach of such regulations.

The Maersk Drilling Group owns rigs directly or through subsidiaries in Denmark, Singapore and the United Kingdom. In Singapore, the income from rigs is subject to local shipping exemption rules imposing a tonnage based tax. However, based on prior tax cases the profit allocation between Denmark and Singapore could materially affect the effective tax rate and the underlying cash tax payments going forward. The OECD project on Base Erosion and Profit Shifting in general and also with respect to suggestions for taxation under Pillar I and Pillar II, in particular the proposed implementation of a global minimum tax rate of at least 15% for large multinational corporations on a jurisdiction-by-jurisdiction basis, may adversely affect the tax setup of the Maersk Drilling Group and result in additional cash taxes.

The political and public focus on multinational companies’ tax payments has increased in recent years, together with the complexity of the tax rules and business activities. As a result, Maersk Drilling Group’s decisions related to tax may be publicly criticized.

As a result of any of the above, the Maersk Drilling Group could experience material adverse effects on its business, financial condition, and results of operations, and could lead to reputational damage.

In addition, the Maersk Drilling Group’s tax positions are subject to audit by relevant tax authorities who may disagree with the Maersk Drilling Group’s interpretations or assessments of the effects of tax laws, treaties, or regulations, or their applicability to its corporate structure or certain of its transactions it has undertaken. Such

 

61


Table of Contents

challenges may arise even in relation to matters that have been the subject of agreement or settlements with the relevant tax authorities in the past, e.g., tax reorganizations. If any tax authority successfully challenges the Maersk Drilling Group’s operational structure, intercompany pricing policies, the taxable presence of its subsidiaries in certain countries, or if the Maersk Drilling Group loses a material tax dispute in any country, or any tax challenge of the Maersk Drilling Group’s tax payments is successful, the Maersk Drilling Group’s effective tax rate on its earnings could increase substantially and the Maersk Drilling Group’s earnings and cash flows from operations could be materially adversely affected. There are, for instance, several transactions taking place between the companies in the Maersk Drilling Group, which must be carried out in accordance with arm’s-length principles in order to avoid adverse tax consequences. Statutory documentation on a transfer pricing policy with the aim of determining arm’s-length prices for intercompany transactions has been established in order to minimize this risk. However, there can be no assurance that the tax authorities will conclude that the Maersk Drilling Group’s transfer pricing policy calculates correct arm’s-length prices for intercompany transactions. This could lead to an adjustment of the agreed price, which would in turn lead to an increased tax cost for the Maersk Drilling Group. The Maersk Drilling Group could therefore incur material amounts of tax cost in excess of currently recorded amounts if its positions are challenged and it is unsuccessful in defending them.

The Maersk Drilling Group’s international activities increase the compliance risk associated with applicable anti-corruption laws.

The Maersk Drilling Group currently operates in several countries, including in some where the risks associated with fraud, bribery, and corruption are significant, and may operate in additional countries in the future. The Maersk Drilling Group may be subject to the requirements of the U.S. Foreign Corrupt Practices Act, the UK Bribery Act, and similar anti-corruption laws in other jurisdictions. The degree of compliance risk associated with such anti-corruption laws may vary from country to country, depending on the strength of the applicable legal and regulatory regime. The Maersk Drilling Group is committed to doing business in accordance with applicable anti-corruption laws and has adopted policies and procedures which are designed to promote legal and regulatory compliance therewith. However, the Maersk Drilling Group’s employees, agents and/or partners acting on its behalf may take actions determined to be in violation of such applicable laws and regulations. The Maersk Drilling Group in such cases may only be able to exercise limited control over the actions of its agents and partners, for example in the case of actions of employees of joint ventures, local partners, agents and sub-contractors. Any such violation could result in substantial fines, sanctions, deferred settlement agreements, civil and/or criminal penalties, or curtailment or prohibition of operations in certain jurisdictions, which might materially adversely affect the Maersk Drilling Group’s business, financial condition, and results of operations. In addition, actual or alleged violations could damage the Maersk Drilling Group’s reputation and ability to do business. Furthermore, detecting, investigating and resolving actual or alleged violations is expensive and could consume significant time and attention of senior management.

The Maersk Drilling Group’s international activities increase the compliance risks associated with economic and trade sanctions imposed by the United States, the European Union and other jurisdictions.

To support Maersk Drilling Group’s international operations, it sources labor, equipment, and parts from a variety of countries, including the U.S. and countries within the EU. Due to the international movement of assets, goods, people, and funds inherent in its operations, the Maersk Drilling Group is subject to economic and trade sanctions and export control laws and regulations imposed by the U.S. (including U.S. Department of Treasury, Office of Foreign Assets Control, U.S. Department of Commerce, and Bureau of Industry and Security), the EU, and other jurisdictions, as well as the United Nations.

Under economic and trade sanctions laws and regulations, relevant authorities may seek to restrict certain business practices and economic activities, which may consequently restrict the Maersk Drilling Group’s business, increase compliance costs, and, in the event of any violations, subject the Maersk Drilling Group to fines, penalties, costly mandatory monitoring of compliance program, and other sanctions.

 

62


Table of Contents

The Maersk Drilling Group is committed to doing business in accordance with applicable sanctions and export control laws and regulations and has adopted policies and procedures which are designed to promote legal and regulatory compliance therewith. However, if the Maersk Drilling Group fails to comply with applicable sanctions through its foreign trade controls compliance programs, it could be subject to substantial fines, sanctions, deferred settlement agreements, civil and/or criminal penalties, or curtailment of operations in certain jurisdictions, which could materially adversely affect the Maersk Drilling Group’s business, financial condition, and results of operations. Similarly, the Maersk Drilling Group’s reliance on third-party subcontractors to perform some parts of its projects creates additional compliance risk, as such third-parties’ non-compliance may expose the Maersk Drilling Group to additional sanctions or penalties.

Expansion of sanctions programs, embargoes and other restrictions in the future (including additional designations of countries or groups subject to sanctions), or modifications in how existing sanctions are interpreted or enforced, could also place or increase restrictions on the Maersk Drilling Group’s operations in countries in which it currently conducts business or on planned and potential operations in countries in which it may conduct business in the future. If any of the risks described above materialize, it could have a material adverse impact on the Maersk Drilling Group’s business, financial condition, and results of operations.

The Maersk Drilling Group’s activities require the processing of personal data, thereby exposing it to compliance risks associated with relevant data protection laws.

In the regular course of business, the Maersk Drilling Group processes certain categories of personal data about its employees, consultants, and individual representatives of various third parties. For example, the Maersk Drilling Group processes personal data of its employees and employees of suppliers and subcontractors who enter and work on its rigs, which may include identifying information, professional qualifications and health information. The Maersk Drilling Group is subject to the requirements of various data privacy and protection laws and regulations in force in the areas in which it operates, including but not limited to the EU General Data Protection Regulation. The Maersk Drilling Group is committed to doing business in accordance with applicable data protection laws and regulations and has adopted policies and procedures which are designed to promote legal and regulatory compliance therewith. However, if the Maersk Drilling Group fails to comply with applicable legal requirements through its data protection compliance program, it could be subject to substantial fines, civil and/or criminal penalties, or curtailment of relevant data processing activities in certain jurisdictions, which might materially adversely affect the Maersk Drilling Group’s business, financial condition, and results of operations.

The Maersk Drilling Group’s operations are subject to the risks of litigation and other legal and regulatory proceedings.

At any given time, the Maersk Drilling Group is involved in litigation and other legal and regulatory proceedings, including with tax authorities, arising in the ordinary course of business or otherwise. Such proceedings may include claims related to commercial, labor, employment, securities, tax, HSSE, or other matters and may result in significant damages and/or fines. The process of managing such proceedings, even if the Maersk Drilling Group is successful, may be costly, and may approximate the cost of damages sought.

Actions against the Maersk Drilling Group could also expose it to adverse publicity, which might adversely affect its brand and reputation. The course and expenses of such proceedings, and the outcome of any given matter, cannot be predicted with certainty and adverse trends, expenses, and outcomes could adversely affect the Maersk Drilling Group’s business, financial condition, and results of operations.

Where provisions have already been recognized in financial statements for ongoing legal or regulatory matters, these have been recognized as the best estimate of the expenditure required to settle the obligation as at the reporting date. Such estimates are inherently uncertain and it is possible that the eventual outcomes may differ materially from current estimates, resulting in future increases or decreases to the required provisions, or

 

63


Table of Contents

actual losses that exceed or fall short of the provisions recognized. For further information, see Note 2.8 of the Maersk Drilling consolidated financial statements and notes for the fiscal year ended December 31, 2020 included elsewhere within this proxy statement/prospectus.

Technology disputes involving the Maersk Drilling Group or the Maersk Drilling Group’s suppliers or sub-suppliers could impact the Maersk Drilling Group’s operations.

The services provided by the Maersk Drilling Group utilize patented or otherwise proprietary technology, and consequently involve a potential risk of infringement of third-party rights. It is not uncommon for industry participants to pursue legal action to protect their intellectual property and entities in the Maersk Drilling Group have been involved in such legal actions in the past. The Maersk Drilling Group is not currently aware of any patents that create a material risk of the Maersk Drilling Group infringing third-party rights. However, there can be no assurance that other industry participants will not pursue legal action against the Maersk Drilling Group to protect intellectual property that the Maersk Drilling Group may at least allegedly utilize. Such legal action could result in limitations on the Maersk Drilling Group’s ability to use the patented technology or require the Maersk Drilling Group to pay a fee for the continued use of intellectual property.

The majority of the intellectual property rights relating to the Maersk Drilling Group are owned by the Maersk Drilling Group’s suppliers or sub-suppliers and relate to the equipment installed on the drilling rigs. In the event that the Maersk Drilling Group or one of its suppliers or sub-suppliers becomes involved in a dispute over infringement of intellectual property rights relating to assets provided by suppliers or sub-suppliers to or otherwise used by the Maersk Drilling Group, the Maersk Drilling Group may lose access to repair services, replacement parts, or could be required to cease use of the relevant assets or intellectual property. The Maersk Drilling Group could also be required to pay royalties for the use of such assets or intellectual property. The consequences of technology disputes involving the Maersk Drilling Group or its suppliers could materially adversely affect the Maersk Drilling Group’s business, financial condition, and results of operations.

Certain of the Maersk Drilling Group’s contracts with its suppliers provide the Maersk Drilling Group with contractual rights to indemnity from the supplier against intellectual property lawsuits. However, such contractual rights to indemnity may not adequately cover losses or cover all risks, and no assurances can be given that the Maersk Drilling Group’s suppliers will be willing or financially able to indemnify the Maersk Drilling Group against these risks, or that such contractual indemnities will protect the Maersk Drilling Group from adverse consequences of such technology disputes.

In addition, the Maersk Drilling Group may choose to pursue legal action to protect its intellectual property. If the Maersk Drilling Group is unable to protect and maintain its intellectual property rights, or if there are any successful intellectual property challenges proceedings against the Maersk Drilling Group, its ability to differentiate its future service offerings could diminish. None of the Maersk Drilling Group’s current service offerings in operation relies on patented information for differentiation and there are currently no such cases ongoing, but there is no guarantee that such cases or claims will not be raised in the future. In addition, from time to time, the Maersk Drilling Group may pursue action to challenge patents of competitors, suppliers and others. Should these cases not succeed, the Maersk Drilling Group may be subject to legal costs and may not be able to use the patented technology or may have to pay a fee for the continued use of such patents. The consequences of any of the intellectual property disputes with third parties described above could materially adversely affect the Maersk Drilling Group’s business, financial condition, and results of operations.

 

64


Table of Contents

GENERAL INFORMATION

Cautionary Note Regarding Forward-Looking Statements

This proxy statement/prospectus and the exchange offer prospectus include forward-looking statements within the meaning of the federal securities laws, including statements regarding the benefits of the Business Combination, the anticipated timing of the Business Combination, the products and services offered by Noble and Maersk Drilling and the markets in which they operate, and Noble’s and Maersk Drilling’s projected future financial and operating results. These forward-looking statements are generally identified by terminology such as “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “should,” “project,” “target,” “plan,” “expect,” or the negatives of these terms or variations of them or similar terminology. The absence of these words, however, does not mean that the statements are not forward-looking. These forward-looking statements are based upon expectations, beliefs, estimates and assumptions that, while considered reasonable as and when made by Noble and its management, and Maersk Drilling and its management, as the case may be, are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties.

Forward-looking statements appear in a number of places in this proxy statement/prospectus and the exchange offer prospectus including, without limitation, in the sections titled “Maersk Drilling’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business of Maersk Drilling and Certain Information About Maersk Drilling.” The risks and uncertainties include, but are not limited to:

 

   

the risk that the Business Combination may not be completed in a timely manner or at all, which may adversely affect the price of Noble’s and Maersk Drilling’s securities;

 

   

the failure to satisfy the conditions to the consummation of the Business Combination, including the adoption of the Business Combination Agreement by the shareholders of Noble, the acceptance of the Offer by the requisite number of Maersk Drilling shareholders and the receipt of certain governmental and regulatory approvals;

 

   

the occurrence of any event, change or other circumstance that could give rise to the termination of the Business Combination Agreement;

 

   

the effects of public health threats, pandemics and epidemics, such as the ongoing outbreak of COVID-19, and the adverse impact thereof on Noble’s or Maersk Drilling’s business, financial condition and results of operations;

 

   

the effect of the announcement or pendency of the Business Combination on Noble’s or Maersk Drilling’s business relationships, performance, and business generally;

 

   

risks that the proposed Business Combination disrupt current plans of Noble or Maersk Drilling and potential difficulties in Noble’s or Maersk Drilling’s employee retention as a result of the proposed Business Combination;

 

   

the outcome of any legal proceedings that may be instituted against Noble or Maersk Drilling related to the Business Combination Agreement or the proposed Business Combination;

 

   

the ability of Topco to list the Topco Shares on NYSE or Nasdaq Copenhagen;

 

   

volatility in the price of the combined company’s securities due to a variety of factors, including changes in the competitive markets in which Topco plans to operate, variations in performance across competitors, changes in laws and regulations affecting Topco’s business and changes in the combined capital structure;

 

   

the effects of actions by, or disputes among OPEC+ members with respect to production levels or other matters related to the price of oil, market conditions, factors affecting the level of activity in the oil and gas industry, and supply and demand of jackup rigs;

 

65


Table of Contents
   

factors affecting the duration of contracts, the actual amount of downtime;

 

   

factors that reduce applicable dayrates, operating hazards and delays;

 

   

risks associated with operations outside the US, actions by regulatory authorities, credit rating agencies, customers, joint venture partners, contractors, lenders and other third parties, legislation and regulations affecting drilling operations, compliance with regulatory requirements, violations of anti-corruption laws, shipyard risk and timing, delays in mobilization of jackup rigs, hurricanes and other weather conditions, and the future price of oil and gas;

 

   

the ability to implement business plans, forecasts, and other expectations (including with respect to synergies and financial and operational metrics, such as EBITDA and free cash flow) after the completion of the proposed Business Combination, and to identify and realize additional opportunities;

 

   

the failure to realize anticipated benefits of the proposed Business Combination;

 

   

risks related to the ability to correctly estimate operating expenses and expenses associated with the Business Combination;

 

   

risks related to the ability to project future cash utilization and reserves needed for contingent future liabilities and business operations;

 

   

the potential impact of announcement or consummation of the proposed Business Combination on relationships with third parties;

 

   

changes in law or regulations affecting Noble, Maersk Drilling or the combined company;

 

   

international, national or local economic, social or political conditions that could adversely affect the companies and their business;

 

   

conditions in the credit markets that may negatively affect the companies and their business; and

 

   

risks associated with assumptions that parties make in connection with the parties’ critical accounting estimates and other judgements.

The foregoing list of factors is not exhaustive. There can be no assurance that the future developments affecting Noble, Maersk Drilling or Topco will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond Noble’s or Maersk Drilling’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements or from our historical experience and our present expectations or projects. You should carefully consider the foregoing factors and the other risks and uncertainties that affect the parties’ businesses, including the factors described in “Risk Factors” in this proxy statement/prospectus and the exchange offer prospectus. Accordingly, you should not rely on these forward-looking statements, which speak only as of the date of this proxy statement/prospectus and the exchange offer prospectus. Topco undertakes no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this proxy statement/prospectus and the exchange offer prospectus or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks Topco describes in the reports it will file from time to time with the SEC after the date of this proxy statement/prospectus and the exchange offer prospectus.

In addition, statements that “Topco believes”, “Noble believes”, “Maersk Drilling believes” and similar statements reflect Topco’s, Noble’s or Maersk Drilling’s beliefs and opinions, as applicable, on the relevant subject. These statements are based on information available to Topco, Noble and/or Maersk Drilling as of the date of this proxy statement/prospectus and the exchange offer prospectus. And while Topco, Noble and Maersk Drilling believe that information provides a reasonable basis for the statements ascribed to them, that information may be limited or incomplete. None of Topco’s, Noble’s or Maersk Drilling’s statements should be read to indicate that it has conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely on these statements.

 

66


Table of Contents

Although Topco, Noble and Maersk Drilling believe the expectations reflected in the forward-looking statements ascribed to them were reasonable at the time made, they cannot guarantee future results, level of activity, performance or achievements. Moreover, neither Topco nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should carefully consider the cautionary statements contained or referred to in this section in connection with the forward-looking statements contained in this proxy statement/prospectus and the exchange offer prospectus and any subsequent written or oral forward-looking statements that may be issued by Topco, Noble, Maersk Drilling or persons acting on their behalf.

 

67


Table of Contents

EXTRAORDINARY GENERAL MEETING OF NOBLE SHAREHOLDERS

This proxy statement/prospectus is being provided to Noble shareholders as part of a solicitation of proxies by the Noble Board for use at the General Meeting of Noble shareholders to be held on May 10, 2022, and at any adjournment or postponement thereof. This proxy statement/prospectus contains important information regarding the General Meeting, the proposals on which you are being asked to vote and information you may find useful in determining how to vote and voting procedures.

This proxy statement/prospectus is being first mailed on or about April 11, 2022 to all shareholders of record of Noble as of April 8, 2022, the record date for the General Meeting. All shareholders of record who owned Noble Shares at the close of business on the record date are entitled to receive notice of, attend and vote at the General Meeting. On the record date, there were 63,071,744 Noble Shares outstanding. Noble shareholders that hold their shares in registered form on the day of the General Meeting are entitled to vote their shares at the General Meeting.

Date, Time and Place of General Meeting

The General Meeting will be held at 9:00 a.m., Central Time, on May 10, 2022 at NobleAdvances Training and Collaboration Center, 12550 Reed Rd., Ste. 200, Sugar Land, Texas 77478, or such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the proposals.

Proposals at the General Meeting

At the General Meeting, Noble shareholders will vote on the following proposals:

 

  1.

Business Combination Proposal—To adopt and approve, as a special resolution, the Business Combination Agreement and the transactions contemplated thereby, including the Business Combination (Proposal No. 1);

 

  2.

NYSE Proposal—To adopt and approve, as an ordinary resolution, assuming the Business Combination Proposal is approved and adopted, for the purposes of complying with the applicable listing rules of the NYSE, the issuance of the Topco Shares in connection with the Business Combination (Proposal No. 2);

 

  3.

Advisory Compensation Proposal—To adopt and approve, as an ordinary resolution, on a non-binding advisory basis, certain compensation that may be paid or become payable to Noble’s named executive officers that is based on or otherwise relates to the Business Combination (Proposal No. 3); and

 

  4.

Adjournment Proposal—To consider and vote upon a proposal to approve, as an ordinary resolution, to adjourn the General Meeting to a later date or dates, if necessary, (a) to permit further solicitation and vote of proxies if there are insufficient votes for the approval of Proposal Nos. 1 through 3, (b) if there are insufficient Noble Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the General Meeting or (c) to allow reasonable time for the filing or mailing of any supplemental or amended disclosures that Noble has determined, based on the advice of outside legal counsel, is reasonably likely to be required under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by Noble shareholders prior to the General Meeting. The Adjournment Proposal (Proposal No. 4) will be presented to Noble shareholders only in the event that there are insufficient votes for the approval of the Business Combination Proposals, if there are insufficient Noble Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the General Meeting or to allow reasonable time for the filing or mailing of certain supplemental or amended disclosures.

 

68


Table of Contents

THE NOBLE BOARD RECOMMENDS THAT

YOU VOTE “FOR” EACH OF THESE PROPOSALS.

Voting Power; Record Date

As a shareholder of Noble, you have a right to vote on certain matters affecting Noble. The proposals that will be presented at the General Meeting and upon which you are being asked to vote are summarized above and fully set forth in this proxy statement/prospectus. You will be entitled to vote or direct votes to be cast at the General Meeting if you owned Noble Shares at the close of business on April 8, 2022, which is the record date for the General Meeting. You are entitled to one vote for each Noble Share that you owned as of the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. On the record date, there were 63,071,744 Noble Shares outstanding.

Quorum and Required Vote for Proposals for the General Meeting

The approval of the Business Combination Proposal requires the affirmative vote of holders of at least two-thirds of Noble Shares present and voting in person or by proxy at a quorate General Meeting. Accordingly, a Noble shareholder’s failure to vote by proxy or to vote in person at the General Meeting will not be counted towards the number of Noble Shares required to validly establish a quorum, and if a valid quorum is otherwise established, such failure to vote will have no effect on the outcome of any vote on the Business Combination Proposal. Broker non-votes and abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the Business Combination Proposal.

The approval of the NYSE Proposal, the Advisory Compensation Proposal and the Adjournment Proposal requires the affirmative vote of holders of at least a majority of Noble Shares present and voting in person or by proxy at a quorate General Meeting. Accordingly, a Noble shareholder’s failure to vote by proxy or to vote in person at the General Meeting will not be counted towards the number of Noble Shares required to validly establish a quorum, and if a valid quorum is otherwise established, such failure to vote will have no effect on the outcome of any vote on the NYSE Proposal, the Advisory Compensation Proposal or the Adjournment Proposal. Broker non-votes and abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the NYSE Proposal, the Advisory Compensation Proposal or the Adjournment Proposal.

For the purposes of the Business Combination Proposals, one or more shareholders who together hold a simple majority of the issued and outstanding Noble Shares entitled to vote at the General Meeting must be present, in person or represented by proxy, at the General Meeting to constitute a quorum and in order to conduct business at the General Meeting. As of the record date for the General Meeting, 31,535,873 Noble Shares would be required to achieve a quorum. Noble directors, executive officers and their affiliates hold approximately .35% of the outstanding Noble Shares as of April 8, 2022.

The Closing is conditioned upon the approval of the Business Combination Proposal and the NYSE Proposal. Each of the NYSE Proposal and the Advisory Compensation Proposal is conditioned upon the approval of the Business Combination Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus.

It is important for you to note that, in the event that the Business Combination Proposal and the NYSE Proposal do not receive the requisite vote for approval, Noble will not consummate the Business Combination.

 

69


Table of Contents

Recommendation to Noble Shareholders

The Noble Board believes that each of the Business Combination Proposals and the Adjournment Proposal to be presented at the General Meeting is in the best interests of Noble and its shareholders and recommends that its shareholders vote “FOR” each of the proposals.

When you consider the recommendation of the Noble Board in favor of approval of these proposals, you should keep in mind that certain Noble directors and officers have interests in the Business Combination that are different from or in addition to (or which may conflict with) your interests as a shareholder. Shareholders should take these interests into account in deciding whether to approve the proposals presented at the General Meeting. These interests include potential severance payments and benefits in connection with the Business Combination to certain of Noble’s executive officers and the fact that Robert W. Eifler will serve as the President and Chief Executive Officer of Topco, Richard B. Barker, William E. Turcotte, Joey M. Kawaia and Blake A. Denton, each an executive officer of Noble, will serve as executive officers of Topco, Charles M. (Chuck) Sledge, the current Chairman of the Noble Board, will become chairman of the Topco Board and Alan J. Hirshberg and Ann D. Pickard, each a director on the Noble Board, will be designated to the Topco Board by Noble upon Closing.

Broker Non-Votes and Abstentions

Broker non-votes and abstentions are considered present for the purposes of establishing a quorum, but will have no effect on the Business Combination Proposals or the Adjournment Proposal.

In general, matters subject to a shareholder vote are classified as “routine” or “non-routine”. In the case of “non-routine” matters, a bank, broker, trust or other nominee holder of record may not vote shares held in “street name” for which they have not received instructions from the beneficial owner (referred to as “broker non-votes”), whereas they may vote those shares in their discretion in the case of any “routine” matter. Each of the Business Combination Proposals are non-routine matters. Accordingly, Noble ordinary shares held in “street name” by a bank, broker, trust or other nominee holder of record will NOT be voted by such bank, broker, trust or other nominee holder of record on any of the proposals.

Voting Your Shares—Shareholders of Record

If you hold your shares in “street name” and are a Noble shareholder of record, you may vote by mail or in person at the General Meeting. Each Noble Share that you own in your name entitles you to one vote on each of the proposals for the General Meeting. Your one or more proxy cards show the number of Noble Shares that you own.

Voting by Mail. You can vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. By signing the proxy card and returning it in the enclosed prepaid and addressed envelope, you are authorizing the individuals named on the proxy card to vote your shares at the General Meeting in the manner you indicate. You are encouraged to sign and return the proxy card even if you plan to attend the General Meeting so that your shares will be voted if you are unable to attend the General Meeting. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the General Meeting. If you sign and return the proxy card but do not give instructions on how to vote your shares, your Noble Shares will be voted as recommended by the Noble Board. The Noble Board recommends voting “FOR” each of the Business Combination Proposals and “FOR” the Adjournment Proposal. Votes submitted by mail must be received by 5:00 p.m., New York City time, on May 9, 2022.

Voting in Person at the Meeting. If you attend the General Meeting and plan to vote in person, you will be provided with a ballot at the General Meeting. If your shares are registered directly in your name, you are considered the shareholder of record and you have the right to vote in person at the General Meeting. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee,

 

70


Table of Contents

you should follow the instructions provided by your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the General Meeting and vote in person, you will need to bring to the General Meeting a legal proxy from your broker, bank or nominee authorizing you to vote these shares. That is the only way Noble can be sure that the broker, bank or nominee has not already voted your Noble Shares.

Voting Your Shares—Beneficial Owners

If your shares are held in an account at a brokerage firm, bank or other nominee, then you are the beneficial owner of shares held in “street name” and this proxy statement/prospectus is being sent to you by that broker, bank or other nominee. The broker, bank or other nominee holding your account is considered to be the shareholder of record for purposes of voting at the General Meeting. As a beneficial owner, you have the right to direct your broker, bank or other nominee regarding how to vote the shares in your account by following the instructions that the broker, bank or other nominee provides you along with this proxy statement/prospectus. As a beneficial owner, if you wish to vote at the General Meeting, you will need to bring to the General Meeting a legal proxy from your broker, bank or other nominee authorizing you to vote those shares. Please see “—Attending the General Meeting” below for more details.

Attending the General Meeting

Only Noble shareholders on the record date or their legal proxy holders may attend the General Meeting. To be admitted to the General Meeting, you will need a form of photo identification and valid proof of ownership of Noble Shares or a valid legal proxy. If you have a legal proxy from a shareholder of record, you must bring a form of photo identification and the legal proxy to the General Meeting. If you have a legal proxy from a “street name” shareholder, you must bring a form of photo identification, a legal proxy from the record holder (that is, the bank, broker or other holder of record) to the “street name” shareholder that is assignable, and the legal proxy from the “street name” shareholder to you. Shareholders may appoint only one proxy holder to attend on their behalf.

Revoking Your Proxy

If you give a proxy, you may revoke it at any time before the General Meeting or at the General Meeting by doing any one of the following:

 

   

you may send another proxy card with a later date;

 

   

you may notify Craig M. Muirhead, Noble’s Vice President, Investor Relations and Treasurer, in writing to Noble Corporation, 13135 Dairy Ashford, Suite 800, Sugar Land, Texas 77478, before the General Meeting that you have revoked your proxy; or

 

   

you may attend the General Meeting, revoke your proxy, and vote in person, as indicated above.

No Additional Matters

The General Meeting has been called only to consider the approval of the Business Combination Proposals and the Adjournment Proposal. Under the Noble Articles, other than procedural matters incident to the conduct of the General Meeting, no other matters may be considered at the General Meeting if they are not included in this proxy statement/prospectus, which serves as the notice of the General Meeting.

Who Can Answer Your Questions About Voting

If you have any questions about how to vote or direct a vote in respect of your Noble Shares, you may call Innisfree M&A Incorporated, Noble’s proxy solicitor, at (877) 750-8240 (toll free), or banks and brokerage firms, please call collect at (212) 750-5833.

 

71


Table of Contents

Appraisal or Dissent Rights

The Cayman Islands Companies Act provides that a shareholder of a Cayman company shall be entitled to payment of the fair value of that person’s shares upon dissenting from a merger or consolidation. However, such rights are not available in respect of the shares of any class for which an open market exists on a recognized stock exchange or recognized interdealer quotation system at the expiry date of the period allowed for written notice of an election to dissent where, upon the merger or the consolidation, the shareholder receives, amongst other things, either:

(a) shares of a surviving or consolidated company, or depository receipts in respect thereof; or

(b) shares of any other company, or depository receipts in respect thereof, which shares or depository receipts at the effective date of the merger or consolidation, are either listed on a national securities exchange or designated as a national market system security on a recognized interdealer quotation system or held of record by more than two thousand holders.

Appraisal or dissent rights are not available to holders of Noble Shares in connection with the Business Combination.

Proxy Solicitation Costs

Noble is soliciting proxies on behalf of the Noble Board. This proxy solicitation is being made by mail, but also may be made by telephone or in person. Noble has engaged Innisfree M&A Incorporated to assist in the solicitation of proxies for the General Meeting. Noble and its directors, officers and employees may also solicit proxies in person. Noble will ask banks, brokers and other institutions, nominees and fiduciaries to forward this proxy statement/prospectus and the related proxy materials to their principals and to obtain their authority to execute proxies and voting instructions.

Noble will bear the entire cost of the proxy solicitation, including the preparation, assembly, printing, mailing and distribution of this proxy statement/prospectus and the related proxy materials. Noble will pay Innisfree M&A Incorporated a fee of $35,000, plus disbursements, reimburse Innisfree M&A Incorporated for its reasonable out-of-pocket expenses and indemnify Innisfree M&A Incorporated and its affiliates against certain claims, liabilities, losses, damages and expenses for their services as Noble’s proxy solicitor. Noble will reimburse brokerage firms and other custodians for their reasonable out-of-pocket expenses for forwarding this proxy statement/prospectus and the related proxy materials to Noble shareholders. Directors, officers and employees of Noble who solicit proxies will not be paid any additional compensation for soliciting.

 

72


Table of Contents

THE BUSINESS COMBINATION

General

On November 10, 2021, Noble, Maersk Drilling, Topco and Merger Sub entered into the Business Combination Agreement, which provides for, among other things, the following transactions:

 

   

Noble will change its jurisdiction of domiciliation from the Cayman Islands to England and Wales through the Merger with and into Merger Sub, with Merger Sub surviving the Merger as a wholly owned subsidiary of Topco;

 

   

Topco will effectuate the Offer with Maersk Drilling shareholders, whereby Maersk Drilling shareholders will have the opportunity to exchange their Maersk Drilling Shares for Topco Shares; and

 

   

upon consummation of the Offer, if more than 90% of the issued and outstanding Maersk Drilling Shares are acquired by Topco, Topco will redeem any Maersk Drilling Shares not exchanged in the Offer by Topco for, at the election of the holder, either Topco Shares or cash (or, for those holders that do not make an election, only cash), under Danish law by way of the Compulsory Purchase.

For more information about the transactions contemplated in the Business Combination Agreement, please see the section entitled “The Business Combination Agreement and Ancillary Documents.” The Business Combination Agreement is incorporated by reference into this proxy statement/prospectus, a copy of which is attached to this proxy statement/prospectus as Annex A.

Conditions to Closing of the Business Combination

Topco’s obligation to accept for payment or, subject to any applicable rules and regulations of Denmark, pay for any Maersk Drilling Shares that are validly tendered in the Offer and not validly withdrawn prior to the expiration of the Offer is subject to certain customary conditions, including, among others, that (a) the Minimum Acceptance Condition shall have been satisfied, (b) Noble shareholder approval of the Business Combination shall have been obtained, (c) no law shall be in effect that prohibits or makes illegal the consummation of the Business Combination, (d) the warranties of the parties being true and correct to the standards applicable to such warranties and each of the covenants of the parties having been performed or complied with in all material respects, (e) any applicable waiting period or approvals or clearances under applicable antitrust laws shall have expired or been earlier terminated or such approvals or clearances shall have been obtained, (f) any applicable waiting period or approvals or clearances under applicable foreign direct investment laws shall have expired or been earlier terminated or such approvals or clearances shall have been obtained, (g) Topco’s Registration Statement on Form S-4 relating to the issuance of the Topco Shares in the Business Combination and the Offering Circular shall have become effective under the Securities Act, and the EU Prospectus Regulation, as applicable, and are not subject to an effective stop order or proceeding seeking a stop order, and (h) the Topco Shares issued in the Business Combination shall have been approved for listing on the NYSE and for admission to trading and official listing on Nasdaq Copenhagen, in each case, subject to official notice of issuance and, in the case of Nasdaq Copenhagen, final approval of the Offering Circular. Maersk Drilling may require that Topco does not accept for payment or, subject to any applicable rules and regulations of Denmark, pay for the Maersk Drilling Shares that are validly tendered in the Offer and not validly withdrawn prior to the expiration of the Offer if certain customary conditions are not met, including, among others, those specified above.

Ownership of Topco

Following Closing, assuming all of the Maersk Drilling Shares are acquired by Topco through the Offer, Topco will own all of Noble’s and Maersk Drilling’s respective businesses and the former shareholders of Noble and former shareholders of Maersk Drilling will each own approximately 50% of the outstanding Topco Shares.

 

73


Table of Contents

Background of the Business Combination

Each of the Noble Board and the Maersk Drilling Board regularly reviews their respective company’s performance, prospects and strategy in light of current and expected business and economic conditions, developments relating to the market for offshore drilling services, and their respective company’s position in the industry. These reviews have included the evaluation of acquisition and divestiture opportunities as well as potential strategic alternatives, including business combinations. To that end, from time to time, senior management of each of Noble and Maersk Drilling have regularly engaged in discussions with other representatives of other companies in the industry, investment bankers and others regarding opportunities to enhance shareholder value and further their respective strategic objectives.

As a result of the strategic initiatives undertaken by the Noble Board, in April 2021, Noble completed its acquisition of Pacific Drilling Company LLC, an international offshore drilling contractor, in an all-stock transaction.

In the second half of 2020, Maersk Drilling had begun a dialogue in relation to a potential business combination with a company referred to herein as Company X. On April 12, 2021, Maersk Drilling submitted a non-binding offer to combine with Company X.

In March 2021 Maersk Drilling sought the assistance of J.P. Morgan as a financial advisor with respect to selected potential transactions. The engagement with J.P. Morgan was formalized with the signing of an engagement letter in August 2021. J.P. Morgan was selected based on its qualifications, expertise and reputation, its knowledge of the businesses and affairs of Maersk Drilling and its knowledge of the industry in which Maersk Drilling operates.

In April and continuing in May 2021, Mr. Robert Eifler, Noble’s President and Chief Executive Officer, and Mr. Jorn Madsen, the Chief Executive Officer of Maersk Drilling, discussed developments in the offshore drilling services industry generally as well as whether there was common interest in exploring a potential combination of Maersk Drilling and Noble. Mr. Madsen indicated that Maersk Drilling might be interested in an all-stock transaction. Messrs. Eifler and Madsen agreed to discuss the potential transaction with their respective boards of directors, with Mr. Madsen indicating that he expected Maersk Drilling would send an indication of interest to Noble. Mr. Eifler updated the Noble Board about his discussions with Mr. Madsen and indicated that Maersk Drilling might provide an indication of interest to Noble regarding a potential combination.

Maersk Drilling sent a non-binding indication of interest to Noble dated May 4, 2021 regarding a potential combination between Maersk Drilling and Noble. Maersk Drilling initially proposed an all-stock transaction reflecting a low- or no-premium combination, with Maersk Drilling issuing shares to Noble’s shareholders representing slightly less than 50% of the shares in the pro forma combined company. The indication of interest also contemplated that the combined company would be headquartered in Lyngby, Denmark and primarily listed on Nasdaq Copenhagen. In addition, certain shareholders of Maersk Drilling and Noble would be asked to provide voting and other support for the potential combination.

On May 19, 2021, the Maersk Drilling Board held a meeting with Maersk Drilling’s executive management team. Representatives of J.P. Morgan also participated in the meeting. The Maersk Drilling Board considered the relative merits of a business combination with Noble, as compared with its existing offer to combine with Company X and other potential strategic opportunities, including the possibility of continuing to operate as a standalone company. Discussions continued between Maersk Drilling and Company X and on May 21, 2021, Maersk Drilling submitted a revised non-binding offer to combine with Company X.

On May 27, 2021, the Noble Board held a meeting with Noble’s executive management team to discuss Maersk Drilling’s May 4th indication of interest. Representatives of Kirkland & Ellis LLP (“Kirkland”), Noble’s legal advisor, and Ducera and DNB ASA (“DNB”), Noble’s financial advisors, also participated in the meeting.

 

74


Table of Contents

The Noble Board observer appointed by the Investor Manager attended this meeting and most subsequent meetings of the Noble Board described herein, but did not participate in executive sessions or vote on any matters. The Noble Board discussed the relative merits of a combination with Maersk Drilling versus remaining a standalone company and other reasonably available strategic alternatives, including asset purchases and combinations with other offshore drilling companies. The Noble Board discussed with executive management the response to Maersk Drilling’s indication of interest and the key issues with respect to a potential combination with Maersk Drilling along with the continuing evaluation of other strategic opportunities.

On May 27, 2021, Maersk Drilling entered into an agreement to divest the combined drilling and production unit Mærsk Inspirer to Havila Sirius for a price of USD 373 million. This transaction was in line with Maersk Drilling’s strategic objective of aligning its fleet to its core business, while also further strengthening Maersk Drilling’s balance sheet through a material reduction of net debt.

In the second quarter of 2021, Noble contacted a company referred to herein as Company A, an offshore drilling company seeking to explore a potential combination. Noble also had various business combination discussions with representatives of a company referred to herein as Company B and a company referred to herein as Company C, both of which are engaged in the offshore drilling services industry, over the course of the second quarter through August 2021 and September 2021, respectively.

On June 1, 2021, Noble sent Maersk Drilling a letter in response to Maersk Drilling’s May 4th indication of interest. Noble expressed its interest in continuing discussions regarding a potential transaction, while noting that Noble was currently undervalued given its relatively recent emergence from financial restructuring and the trading illiquidity of its shares. Noble also proposed that the combined company be dual-listed on the NYSE and Nasdaq Copenhagen and emphasized the importance of meaningful cost synergies to the overall transaction.

On June 7, 2021, Mr. Madsen sent a response to Noble regarding the potential combination. Maersk Drilling agreed that fair valuation was essential and noted that Noble’s expected relisting on the NYSE would mean that both companies would soon have observable market capitalizations, which could serve as reference points for establishing a fair and appropriate equity split for their respective shareholders. Mr. Madsen also proposed that the parties enter into a confidentiality agreement to facilitate the exchange of diligence materials. Mr. Madsen also proposed a meeting between the parties to identify and quantify the realizable cost synergies from the potential transaction.

On June 9, 2021, Noble shares began trading on the NYSE.

On June 11, 2021, Noble and Maersk Drilling entered into a mutual confidentiality agreement. The confidentiality agreement subjected each of Noble and Maersk Drilling to a customary standstill obligation regarding the other party. The confidentiality agreement also contained a “fall away” provision rendering the standstill obligations inapplicable to a party if any other person, among other things, entered into an agreement with the other party contemplating the acquisition of at least 50% of the outstanding capital stock of the other party or all or substantially all of the other party’s assets. Following execution of the confidentiality agreement, management and outside advisors of each of Noble and Maersk Drilling exchanged materials, conducted preliminary structuring, financial and operational due diligence (including a review of assets and liabilities), and analyzed the achievable cost synergies of the combined company following a transaction.

On June 15, 2021, the Maersk Drilling Board determined to withdraw its offer for Company X, on the basis that the offer had received a lack of engagement from Company X.

On June 21, 2021, Noble and Company A executed a mutual confidentiality agreement to facilitate the exchange of information for preliminary legal and financial due diligence. The confidentiality agreement subjected each of Noble and Company A to a customary standstill obligation regarding the other party. The confidentiality agreement also contained a “fall away” provision rendering the standstill obligations inapplicable

 

75


Table of Contents

to a party if any other person enters into an agreement to acquire more than 50% of the outstanding capital stock or substantially all of the assets of the other party.

On June 29 and 30, 2021, the Maersk Drilling Board and members of the Maersk Drilling executive team held a meeting. The Maersk Drilling Board discussed recent developments in respect of potential business combinations, including with Noble. In respect of the Noble transaction, the Maersk Drilling Board noted that the parties were working to refine common thinking around the strategic vision of the combined company, the transaction structure and potential cost synergies. It was also noted that Maersk Drilling had been approached for initial discussions by a company referred to herein as Company Y.

On July 16, 2021, Noble and Company C entered into a non-disclosure agreement. The confidentiality agreement subjected each of Noble and Company C to a customary standstill obligation regarding the other party similar to the provisions in the non-disclosure agreement with Company A.

On July 19, 2021, the Noble Board observer, with the knowledge and understanding of the Noble Board, went to Copenhagen and met with representatives of APMH Invest to discuss certain matters related to the transaction.

On July 23, 2021, the Noble Board and members of Noble management held a regularly scheduled meeting of the Noble Board to discuss developments in discussions held with Company A and the valuations of each of Noble and Company A. The Noble Board also discussed the proposed sale of four jack-up rigs that were operating in Saudi Arabia to a subsidiary of ADES International Holding (“ADES”). The Noble Board determined that the continued evaluation of a strategic transaction with Maersk Drilling would be prudent and, in furtherance thereof, approved continuing discussions, including conducting additional due diligence and authorizing representatives of Noble to meet representatives of Maersk Drilling.

On July 29, 2021, the Noble Board and members of Noble management met to discuss the opportunity with Maersk Drilling and discussed the Noble Board’s view of the key points of the proposed business combination.

In August 2021, after a thorough analysis of each company’s publicly available information, Noble and Company B mutually agreed not to pursue a transaction.

On August 11, 2021, the Maersk Drilling Board and members of the Maersk Drilling executive team met together with representatives from J.P. Morgan, to discuss the terms of a potential transaction with Noble. The Maersk Drilling Board considered, amongst other things, the strategic rationale for the transaction and various financial and legal issues, including, among others, potential cost synergies, due diligence and transaction structures. On the same day, the Maersk Drilling Board sent a non-binding proposal to Noble regarding the proposed business combination. Maersk Drilling reiterated its continued belief in the commercial logic of a transaction. Under Maersk Drilling’s non-binding proposal for an all-stock transaction, Noble shareholders would receive 48% of the equity of the combined company, on a fully diluted basis, reflecting an implied equity value for Noble of $1,402 million. Maersk Drilling’s proposed equity split and valuation of Noble was based on the average relative market capitalizations of the two companies since the re-listing of Noble on the NYSE and the then-current market values of the two companies. Maersk Drilling also reiterated its expectation that certain of Noble’s and Maersk Drilling’s shareholders would provide voting and other support for the transaction. The proposal also contemplated director nomination rights for APMH Invest and the Investor Manager, subject to each retaining a minimum ownership level of 15%, and that Mr. Madsen would be the chief executive officer of the combined company, which would be headquartered in Lyngby.

On August 13, 2021, the Noble Board and members of Noble management met to evaluate the attractiveness of a potential transaction with Company A relative to other opportunities, including a potential transaction with Maersk Drilling. The Noble Board also discussed, among other things, potential valuation ranges, liquidity for shareholders and potential investor reactions. Mr. Eifler noted that the potential transaction with Maersk Drilling represented a transformational opportunity for Noble, premised on combining two of the youngest fleets and best

 

76


Table of Contents

brands in the sector, while a business combination with Company A would accelerate near-term cash flow but would result in an older and lower-specification combined fleet. The Noble Board also discussed the increasing importance of fleet quality to some customers. After a discussion with its financial advisor, the Noble Board observed that the valuation ascribed to Noble by Maersk Drilling was a limiting factor to further engagement. The Noble Board also discussed matters relating to corporate governance, including the location of the combined company’s headquarters.

On August 25, 2021, Noble sent Company C a proposal for a business combination.

During August and early September, Maersk Drilling and Company Y’s advisors continued to have dialogue exploring a potential business combination. On September 3, 2021, Maersk Drilling and Company Y entered into a confidentiality agreement governing the terms and conditions under which the parties would exchange certain competitively sensitive information about each company. The confidentiality agreement subjected each of Maersk Drilling and Company Y to a customary standstill obligation regarding the other party.

On August 30, 2021, Noble responded to Maersk Drilling’s August 11th letter to propose a transaction whereby Noble would acquire all of the outstanding stock of Maersk Drilling in exchange for approximately 47% of the equity of the combined company (excluding shares issuable under tranche warrants and management equity plans). The proposal also noted that the valuation in Maersk Drilling’s August 11th proposal undervalued Noble on a relative basis to Maersk Drilling. The proposal also suggested that the combined company should be headquartered in Houston and that the selection of the chief executive officer be determined as part of the process of determining how to deliver maximum upside to the shareholders. The letter also stated Noble’s view that the combined company would need to have a majority of independent and highly capable board members and suggested that they be proportionally split between the two companies with representatives appointed by APMH Invest and the Investor Manager.

Messrs. Sledge and Hemmingsen, the Chairman of the Maersk Drilling Board, subsequently had multiple telephone conversations to discuss the potential transaction, including expected synergies, the business strategy for the combined company, each party’s progress on due diligence and expectations on timing. During these conversations, Messrs. Sledge and Hemmingsen also discussed various social issues, including board size and composition, the composition of the senior leadership team, organizational structure, and headquarters. Mr. Sledge provided the Noble Board with regular updates on these conversations.

During the first half of September 2021, Noble and Company A also continued to discuss a potential business combination. Kirkland and Company A’s counsel engaged in structuring discussions and exchanged drafts of a merger agreement. Additionally, during late August, advisors for Company C and Noble held discussions regarding Noble’s proposal from August 25, 2021, and Company C’s advisors communicated that Company C did not find it acceptable. The Noble Board then decided not to continue pursuing a business combination with Company C.

On September 6, 2021, the Maersk Drilling Board and members of the Maersk Drilling executive team met to discuss the Noble transaction. Representatives from J.P. Morgan and the Maersk Drilling Board compared the Maersk Drilling offer of August 11, 2021 against the Noble counter-offer of August 30, 2021. In addition, the Maersk Drilling Board continued its earlier consideration of potential strategic alternatives, and agreed that Maersk Drilling should submit a non-binding proposal to Company Y.

On September 7, 2021, Messrs. Sledge and Hemmingsen, the Noble board observer and a representative of APMH Invest met to discuss certain matters related to the transaction.

On September 10, 2021, Maersk Drilling sent a non-binding offer for a potential business combination to Company Y. Maersk Drilling received some preliminary feedback from Company Y, however the parties did not progress any further in discussions.

 

77


Table of Contents

On September 11, 2021, the Noble Board and members of Noble management held a meeting to discuss the Maersk Drilling transaction. Representatives from Ducera, DNB and the Noble Board discussed the relative valuations of Maersk Drilling and Noble based on the financial and operational diligence that had been performed and in relation to the companies’ trading prices. The Noble Board agreed to revise its proposal to Maersk Drilling and accordingly a letter was sent from Noble to Maersk Drilling on September 13, 2021, proposing that Noble would acquire all of the outstanding stock of Maersk Drilling in exchange for 50% of the equity of the combined company (excluding shares issuable under tranche warrants and management equity plans). The letter also proposed that the combined company board consist of seven members including three independent directors nominated by Noble (one of whom would be chairman of the board), three directors nominated by Maersk Drilling (at least one of whom would be independent and reasonably acceptable to Noble), and the chief executive officer, who would be Mr. Eifler. The letter also proposed that APMH Invest have a nomination right for two directors until it held less than 20% of the shares of the combined company, at which point it would have the ability to nominate one director so long as it held at least 15% of the shares. APMH Invest would have no nomination right below the 15% threshold.

On September 13, 2021, the Noble Board and members of Noble management held a meeting to discuss potential structures for a transaction with Maersk Drilling. On September 15, 2021, Kirkland sent Davis Polk & Wardwell London LLP, counsel to Maersk Drilling (“Davis Polk”), a draft Business Combination Agreement. Among other provisions, the draft Business Combination Agreement contemplated a statutory merger structure, the provision of support agreements from certain Noble and Maersk Drilling shareholders and a mutual “force the vote” provision whereby neither party could terminate the Business Combination Agreement in the event of an alternative superior proposal.

On September 15, 2021, the Maersk Drilling Board and members of the Maersk Drilling executive team held a meeting to discuss Noble’s letter of September 13, 2021. A representative from Davis Polk also attended. The Maersk Drilling Board considered the relative financial valuation underlying the proposal, potential cost synergies and associated value accretion to shareholders, as well as the key terms of the Business Combination Agreement. The Maersk Drilling Board also discussed the proposed transaction structure, with a preference for the transaction to be effected by way of a Danish tender offer with Topco domiciled in the European Union or the United Kingdom. The Maersk Drilling Board extensively discussed the likely implications, including on value creation for shareholders, of reverting to Noble with another counteroffer; Maersk Drilling’s executive team’s considerations on the proposed transaction; and the viability and relative attractiveness of alternative transactions. On September 17, 2021, Maersk Drilling sent Noble a letter in response to Noble’s letter of September 13, 2021. Maersk Drilling expressed its preference for the transaction to be structured as a cross border merger or an exchange offer.

Later on September 17, 2021, the Noble Board and members of Noble management held a meeting to discuss the Maersk Drilling transaction. Representatives from Kirkland noted that Davis Polk had expressed Maersk Drilling’s preference for structuring the proposed transaction as a tender offer rather than a statutory merger. Maersk Drilling had also expressed a preference that the combined company be domiciled in the European Union or the United Kingdom. The Noble Board discussed the implications of such a structure and directed its advisors to review the tax consequences of re-domiciliation from the Cayman Islands. The Noble Board then discussed the composition of the combined company board. The Noble Board agreed to propose that the board of the combined company be comprised of three directors selected by Maersk Drilling, three directors selected by Noble, and the chief executive officer of the combined company. The Noble Board also expressed its view that the chairperson should be an independent director and a Noble director.

On September 20, 2021, Kirkland sent a revised draft of the Business Combination Agreement providing for a tender offer to Maersk Drilling’s shareholders. This draft contemplated a “force the vote” provision applicable to Noble and similarly prohibited Maersk Drilling from terminating the Business Combination Agreement in the event of an alternative superior proposal. Additionally, the draft provided that more than 90% of Maersk Drilling’s outstanding shares and voting rights would need to be tendered for the proposed transaction to be consummated (provided that Topco could modify such percentage down to 50.1%).

 

78


Table of Contents

On September 23, 2021, the Noble Board and members of Noble management held a meeting to discuss the Maersk Drilling transaction. After receiving an update on the various workstreams relating to the potential transaction with Maersk Drilling, the Noble Board also discussed the status of the potential business combination with Company A, noting that Company A had not responded to concerns raised with respect to certain elements of Noble’s valuation of Company A and Company A’s counsel had not responded to the latest draft of the merger agreement sent by Kirkland. Following discussion, the Noble Board determined to cease discussions with Company A in order to focus on a transaction with Maersk Drilling.

On September 29, 2021, Maersk Drilling and Noble executed a Clean Team Confidentiality Agreement, governing the terms and conditions under which the parties would exchange certain competitively sensitive information. Noble and Maersk Drilling also began discussing the administrative complexity created by Maersk Drilling’s numerous small shareholders. Maersk Drilling proposed that each Maersk Drilling shareholder have the opportunity to elect to receive cash, payable in DKK, in exchange for up to USD 1,000 of their shares.

On October 6, 2021, Davis Polk sent a revised draft of the Business Combination Agreement to Kirkland. Among other provisions, the draft provided that at least 80% of Maersk Drilling’s outstanding shares and voting rights would need to be tendered for the proposed transaction to be consummated (provided that Topco could modify such percentage down to 50.1%). The draft included a preliminary version of the cash election mechanism and indicated that Maersk Drilling intended to incorporate covenants regarding adherence to terms and practices of severance applicable to its employees. Kirkland also circulated drafts of a support agreement and an irrevocable undertaking for certain of Noble’s and Maersk Drilling’s shareholders, respectively.

On October 8, 2021, the Noble Board and members of Noble management held a meeting to discuss the Maersk Drilling transaction. The Noble Board received an update on the status of due diligence efforts relating to the proposed transaction with Maersk Drilling. Representatives from Kirkland also provided an overview of the terms and conditions of the Business Combination Agreement. Ducera and J.P. Morgan also began to work on quantifying the amount of cash that could be needed if the parties agreed on the cash election mechanism. The Noble Board then discussed entering into non-disclosure agreements with certain Noble shareholders (including the Investor Manager) in order to facilitate the negotiation of support agreements for the proposed transaction. The Noble Board agreed that it was timely to begin such discussions.

On October 15, 2021, the Noble Board and members of Noble management discussed the status of due diligence efforts relating to Maersk Drilling and synergies expected to result from the proposed transaction. The Noble Board also discussed the analysis of Noble’s and Maersk Drilling’s advisors relating to antitrust approvals in various jurisdictions. Mr. Sledge then provided the Noble Board with an update on a recent call with Mr. Hemmingsen during which Mr. Hemmingsen had informed Mr. Sledge that he would be one of Maersk Drilling’s nominees to the board of the combined company. Mr. Sledge also noted that he and Mr. Hemmingsen had also discussed the pending drilling rig sales by both Maersk Drilling and Noble and the benefits of entering into the Business Combination Agreement following the closings of those sales.

On October 18, 2021, the Noble Board and members of Noble management held a meeting to discuss the Maersk Drilling transaction. The Noble Board reviewed with management certain updates to the financial model based on ongoing due diligence.

On October 20, 2021, Davis Polk sent a revised draft of the Business Combination Agreement to Kirkland. The draft contemplated, among other things, that Noble’s termination fee be equal to 4% of its market capitalization immediately prior to the execution of the Business Combination Agreement and Maersk Drilling’s termination fee be equal to 1% of its market capitalization immediately prior to the execution of the Business Combination Agreement. The parties subsequently agreed on identical termination fees for Noble and Maersk Drilling equal to 1% of Maersk Drilling’s market capitalization immediately prior to the execution of the Business Combination Agreement, save for where if, in certain circumstances, an antitrust authority issued a decision prohibiting one or more of the transactions contemplated by the Business Combination Agreement or

 

79


Table of Contents

preventing the consummation of such transactions, where Noble would be required to provide a termination fee of $50 million. The draft also proposed that each of Maersk Drilling’s prior practices governing severance, together with any similar agreements entered into in connection with the Business Combination Agreement, remain in effect.

On October 22, 2021, the Noble Board and members of Noble management held a meeting to discuss the Maersk Drilling transaction. Representatives from Kirkland reported that the parties needed to reach a consensus on antitrust issues in the Business Combination Agreement. Members of Noble management also updated the Noble Board about the tax implications of re-domiciliation from the Cayman Islands to the United Kingdom.

On October 27, 2021, in connection with the negotiation of support agreements, the Investor Manager, Canyon Capital Advisors LLC and the GoldenTree Funds entered into confidentiality agreements with Noble in order to receive and review information regarding the transaction. On the same day, Maersk Drilling closed its sale of the Maersk Inspirer.

On October 28, 2021, the Maersk Drilling Board and members of the Maersk Drilling executive team held a meeting to discuss the Noble transaction. Representatives of J.P. Morgan reviewed a preliminary financial analysis. A representative from Davis Polk discussed the most recent changes to the terms of the Business Combination Agreement and ancillary agreements. The Maersk Drilling Board additionally discussed, amongst other things, due diligence findings, antitrust matters, valuation and key structuring considerations associated with the proposed business combination.

On October 29, 2021, the Noble Board and members of Noble management held a meeting to discuss the Maersk Drilling transaction. Representatives from Ducera provided the Noble Board with an overview of Ducera’s analyses of the Merger Consideration in preparation for delivering a fairness opinion. Following a discussion of the analyses, the Noble Board comprehensively reviewed the antitrust clearance process with management and with Noble’s legal and financial advisors. On the same day, Davis Polk sent Kirkland revised drafts of the Business Combination Agreement and the ancillary agreements. The draft of the Business Combination Agreement provided Maersk Drilling with a unilateral termination right upon the occurrence of certain events that could result in delaying or preventing the requisite antitrust clearances.

On October 31, 2021, certain members of Noble’s and Maersk Drilling’s management, boards and outside counsel, together with the Noble Board observer, and representatives of APMH Invest, held a telephonic meeting to discuss various matters.

On November 2, 2021, Noble completed the sale of four jack-up rigs to a subsidiary of ADES.

On November 4, 2021, representatives of Davis Polk and Kirkland discussed matters that remained unresolved with respect to the Business Combination Agreement and the ancillary agreements, including (i) the provision of letters of intent by certain other Maersk Drilling shareholders regarding their support for the transaction, (ii) setting the minimum tender offer condition at a level that would necessitate meaningful acceptance of the tender offer by Maersk Drilling’s minority shareholders, (iii) the percentage of Noble shares that certain Noble shareholders would be willing to hold for various periods in order to support the proposed transaction, (iv) the aggregate cash cap the Maersk Drilling shareholders would have the opportunity to elect to receive in exchange for their respective shares, and (v) antitrust-related provisions of the Business Combination Agreement. The following day, Davis Polk sent a revised draft of the Business Combination Agreement reflecting Maersk Drilling’s position on the unresolved matters to Kirkland. Among other things, the draft provided that Noble would pay Maersk Drilling a termination fee if, under certain circumstances, an antitrust authority issued a decision prohibiting one or more of the transactions contemplated by the Business Combination Agreement or preventing the consummation of such transactions.

 

80


Table of Contents

On November 6 and 7, 2021, the Noble Board met with members of Noble management and its advisors to discuss the unresolved matters. Kirkland also continued discussions of the support agreements with certain Noble shareholders. Over the next two days, Kirkland and Davis Polk finalized the Business Combination Agreement and the ancillary agreements.

On November 9, 2021, the Maersk Drilling Board held a meeting to discuss the Noble transaction. A representative of Davis Polk provided the Maersk Drilling Board with an overview of the key changes to the terms of the proposed transaction since the board meeting on October 28, 2021. J.P. Morgan then reviewed with the Maersk Drilling Board its financial analysis of the consideration to be paid to the holders of Maersk Drilling Shares provided for in the Business Combination Agreement and delivered to the Maersk Drilling Board its November 9, 2021 oral opinion, which was confirmed by delivery of a written opinion, dated November 10, 2021, to the effect that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing the opinion, the consideration to be paid to the holders of Maersk Drilling Shares in the proposed Business Combination was fair, from a financial point of view, to such holders, as more fully described below in the section “—Opinion of Maersk Drilling’s Financial Advisor”. After Maersk Drilling’s financial and legal advisors responded to questions from the Maersk Drilling Board, the Maersk Drilling Board unanimously approved the execution of the Business Combination Agreement, the Offer and the other transactions contemplated by the Business Combination Agreement.

Later on November 9, 2021, Noble held a meeting of the Noble Board, which was also attended by members of Noble’s executive management and representatives from Kirkland, Ducera and DNB. At the meeting, representatives of Kirkland provided to the Noble Board an update regarding the terms of the proposed transaction, including the terms of the Business Combination Agreement and ancillary agreements. Representatives of Kirkland and the Noble Board also discussed the Noble Board’s fiduciary duties in the context of approving a strategic business combination transaction. Also at the meeting, Ducera reviewed with the Noble Board its financial analyses of the Merger Consideration and delivered to the Noble Board an oral opinion, subsequently confirmed in writing, to the effect that, as of such date and subject to the assumptions, limitations, qualifications and other matters considered in the preparation thereof, the Merger Consideration was fair, from a financial point of view, to the holders of Noble Shares (other than Noble Shares held by Maersk Drilling or its affiliates). The Noble Board then unanimously approved the Business Combination Agreement, the Merger, the Offer, the other transactions contemplated by the Business Combination Agreement and resolved to recommend the approval by Noble’s shareholders of the Merger and the Share Issuance pursuant to the Business Combination Agreement.

Prior to the opening of markets in Denmark on November 10, 2021, Noble and Maersk Drilling jointly announced the transaction.

The Noble Board’s Reasons for the Business Combination

The Noble Board carefully evaluated the Business Combination Agreement and the transactions contemplated thereby. On November 9, 2021, the Noble Board adopted resolutions approving the terms of, and the transactions contemplated by, the Business Combination Agreement and resolved to unanimously recommend the approval by Noble’s shareholders of the Merger and the Share Issuance.

 

81


Table of Contents

In the course of reaching its decision on November 9, 2021 the Noble Board consulted with Noble management and Noble’s financial and legal advisors and considered a variety of substantive factors, both positive and negative, and the potential benefits and detriments of the transaction to Noble and its shareholders. The Noble Board believed that, taken as a whole, the following factors supported their respective decisions to approve the Business Combination Agreement (not necessarily in order of relative importance):

Strategic factors considered by the Noble Board:

 

   

World-class offshore driller. The transaction creates the youngest and highest specification fleet of scale featuring seventh generation ultra-deepwater drillships and harsh environment jackups with a combined track record of industry-leading utilization. The scale and modernity of the fleet is expected to enable the combined company to operate more efficiently. The combined company will also be attractively diversified across asset classes, geographic regions and customers.

 

   

Accretive to all shareholders. The transaction is expected to result in $125 million of run-rate annual cost synergies within two years post-closing, with value beginning to be realized in the near term post-closing. The transaction is thus expected to be highly accretive to free cash flow per share for both Noble and Maersk Drilling shareholders in the first full year post-closing. The streamlined cost structure is also expected to further the combined company’s cost-competitiveness.

 

   

Enhanced customer experience and sustainability. Like Noble, Maersk Drilling has demonstrated a strong commitment to best-in-class safety performance and customer satisfaction. The modern fleet is expected to provide a robust platform for technical innovation in addition to enabling the combined company to be a first mover in sustainability initiatives.

 

   

Platform for strong cash flow generation and distribution. The combined company has a normalized free cash flow potential of $375 million in 2023 and onward. Additionally, the combined company is expected to have a best-in-class balance sheet with low leverage and significant liquidity, including approximately $900 million of cash, which will facilitate the return of capital to shareholders. Given the efficiency of its fleet and synergies, the combined company is also expected to have the potential to grow its cash flows faster as the global offshore market recovery continues.

 

   

Balanced corporate governance and leadership. The Topco Board will initially be comprised of seven individuals: three individuals designated by Maersk Drilling (Claus V. Hemmingsen, the current Chairman of the Maersk Drilling Board, Kristin H. Holth and Alastair Maxwell), three individuals designated by Noble (Charles M. (Chuck) Sledge, the current Chairman of the Noble Board, who will become Chairman of the combined company, Alan J. Hirshberg and Ann D. Pickard) and Robert W. Eifler, the Chief Executive Officer of Noble, who will serve as the Chief Executive Officer of the combined company.

Other potentially favorable factors considered by the Noble Board:

 

   

Improved business climate. The current and prospective business climate in the offshore drilling industry, including the regulatory environment, has improved dramatically since the initial outbreak of COVID-19 and the combined company will be well-positioned among likely competitors.

 

   

Due diligence. The favorable results of the due diligence review of Maersk Drilling and its business conducted by Noble and its financial advisors and outside legal counsel.

 

   

Business Combination Agreement. The view that the terms and conditions of the Business Combination Agreement, including the covenants, closing conditions and termination provisions, are favorable to completing the transaction.

 

   

Fairness opinion. Ducera’s oral opinion delivered on November 9, 2021, subsequently confirmed in writing, to the effect that, as of such date and subject to the assumptions, limitations, qualifications and other matters considered in the preparation thereof, the Merger Consideration was fair, from a financial point of view, to the holders of Noble Shares (other than Noble Shares held by Maersk Drilling or its affiliates).

 

82


Table of Contents
   

Alternatives available. Potential strategic alternatives that might be available to Noble relative to the transaction, including remaining a standalone entity or other acquisition opportunities and the belief of the Noble Board that the transaction is in the best interests of Noble and its shareholders given the potential risks, rewards and uncertainties associated with each alternative, including execution and regulatory risks and achievement of anticipated synergies.

Risks and potentially negative factors considered by the Noble Board:

 

   

Integration risk. There are significant risks inherent in combining and integrating two companies, including that the companies may not be successfully integrated or that the expected synergies from combining the two companies may not be realized, and that successful integration of the companies will require the dedication of significant management resources, which will temporarily detract attention from the day-to-day businesses of the combined company.

 

   

Failure to realize anticipated benefits. There are uncertainties in timing and execution with respect to the anticipated benefits of the transaction.

 

   

Implied premium. The equity being provided to Maersk Drilling’s shareholders based on the exchange ratio implies a premium of 28% to the trading price of Maersk Drilling shares as of the last trading date prior to the announcement of the transaction.

 

   

Fixed exchange ratio. The tender offer consideration to be received by holders of Maersk Drilling shares consists of shares based on a fixed exchange ratio and consequently the value of the consideration to be received by Maersk Drilling shareholders may increase.

 

   

Termination fees. The Business Combination Agreement provides that, in certain circumstances relating to the failure to receive necessary regulatory approvals from antitrust authorities, Noble could be required to pay a termination fee of $50 million to Maersk Drilling and, in certain other circumstances, a termination fee equal to $15 million.

 

   

Regulatory risk. The risk that regulatory approvals necessary to consummate the transaction may be delayed or not granted, which may delay or jeopardize the transaction, or that a regulatory or other body imposes restrictions or requires divestitures in connection with the transaction, compliance with which would be necessary but could adversely impact the business of the combined company.

 

   

Tender offer acceptance. Maersk Drilling’s obligation to close the transaction is conditioned on 80% of the then outstanding Maersk Drilling shares and voting rights of Maersk Drilling (which percentage may be lowered by Topco in its sole discretion to not less than 70%) being validly tendered.

 

   

Restrictions on Noble’s activities. The restrictions on Noble prior to the consummation of the transaction with respect to taking actions outside the ordinary course of business, which may delay or prevent Noble from undertaking opportunities that may arise or other actions it would otherwise take pending consummation of the transaction.

 

   

Transaction costs. The substantial costs to be incurred in connection with the transaction, including the costs of integrating the businesses of Noble and Maersk Drilling and the transaction costs to be incurred in connection with the transaction.

 

   

Termination fee. The $15 million termination fee that Maersk Drilling would be required to pay under the Business Combination Agreement upon termination of the Business Combination Agreement under certain circumstances would be insufficient to compensate Noble for its costs incurred in connection with the Business Combination Agreement.

 

   

Inability to retain employees. The possibility of losing key employees and skilled workers as a result of the transaction and the expected consolidation of Noble and Maersk Drilling personnel.

 

   

Loss of customers. The possibility of customer overlap or that key customers may choose not to do business with the combined company.

 

83


Table of Contents
   

Pace of decarbonization. The pace and extent of the energy transition could pose a risk to the combined company and result in lower demand for its services. The combined company’s engagement in the energy transition may be unsuccessful or slower than investors, customers and other stakeholders prefer, which could adversely impact the combined company’s share price, reputation and demand for its products. In its efforts to facilitate decarbonization, the combined company risks investing in technologies, markets or low-carbon products that are unsuccessful or less profitable because there is limited demand for them or they result in higher costs.

The Noble Board also expects that a growing share of the combined company’s greenhouse gas emissions will be subject to regulation, resulting in increased compliance costs and operational restrictions. Regulators may seek to limit certain fossil fuel projects or make it more difficult to obtain required permits, which could have an impact on the realization of projected operating results and synergies. Additionally, investors may limit funds available for investment in companies engaged in the oil and gas industry.

 

   

Other risks. Other risks of the type and nature described under “Risk Factors.”

The foregoing discussion of information and factors considered by the Noble Board is not exhaustive, but the Noble Board believes it includes the material factors considered by the Noble Board. In view of the wide variety of factors considered in connection with their evaluation of the transaction and the complexity of these matters, the Noble Board did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative or specific weight or values to any of these factors. Rather, the Noble Board viewed their position and recommendation as being based on an overall analysis and on the totality of the information presented to and factors considered by them. In addition, in considering the factors described above, individual directors may have given different weights to different factors.

The factors contained in this explanation of the Noble Board’s reasons for the transaction and other information presented in this section of the proxy statement/prospectus contain information that is forward-looking in nature and, therefore, should be read in light of the factors discussed in “General Information—Cautionary Note Regarding Forward-Looking Statements”.

The Noble financial forecasts and Noble’s management’s forecasts for Maersk Drilling were prepared by Noble in connection with the proposed transaction prior to execution of the Business Combination Agreement.

These financial forecasts were prepared by, and are the responsibility of, Noble’s management. Neither PricewaterhouseCoopers LLP, Noble’s independent registered public accounting firm, nor any other independent accountant, have audited, reviewed, examined, compiled nor applied agreed-upon procedures with respect to the Noble financial forecasts or Noble’s management’s forecasts for Maersk Drilling and, accordingly, neither PricewaterhouseCoopers LLP nor any other independent accountants express an opinion or any other form of assurance with respect thereto. The report of PricewaterhouseCoopers LLP incorporated by reference in this proxy statement/prospectus and the exchange offer prospectus relates to Noble’s previously issued financial statements. The foregoing report does not extend to the Noble financial forecasts or Noble’s management’s forecasts for Maersk Drilling and should not be read to do so.

 

84


Table of Contents

The Maersk Drilling Board’s Reasons for the Business Combination

In evaluating the Business Combination Agreement and the other transactions contemplated thereby, the Maersk Drilling Board consulted with, and received the advice of, Maersk Drilling’s management and its legal and financial advisors. In reaching its decision to approve the Business Combination Agreement and the transactions contemplated thereby, the Maersk Drilling Board considered a number of factors, including, but not limited to, the following:

Strategic and Financial Considerations

 

   

the belief that the Business Combination will result in the creation of a world-class offshore drilling company;

 

   

the belief that the combined company will own and operate an industry leading fleet of high-specification and modern floaters and jack-ups operating across harsh and benign environments, for a diverse range of blue-chip customers in the most attractive oil and gas basins, equipping it to respond to economic and industry developments, including cyclical economic environments;

 

   

the belief that the combined company will benefit from a diversified revenue mix, a robust contract backlog with significant earnings visibility, a solid balance sheet, and a strong free cash flow potential, supporting the potential for return of capital to shareholders while providing resiliency through the industry cycle;

 

   

the belief that the Business Combination will allow the combined company to realize significant run-rate annual cost synergies of $125 million within two years of Closing and that such synergies and the scale of the combined company will significantly enhance its cost-competitiveness;

 

   

the belief that the combined company will be well positioned to preserve the value, developed over several decades, of Maersk Drilling’s North Sea harsh environment business, particularly in Norway;

 

   

the belief that the combined capabilities of Maersk Drilling and Noble in different sub-segments of the offshore drilling market, with Maersk Drilling’s high quality floaters and strong clientele, presence and expertise, especially in the North Sea harsh environment jack-up market, having the ability to bolster Noble’s strong presence in ultra-deepwater hotspots;

 

   

the belief that Maersk Drilling and Noble share complementary core values and business principles, including unwavering commitments to industry leading safety performance and customer satisfaction, enabling the combined company to enhance its customers’ experience;

 

   

the belief that the combined company will aspire to utilize best-in-class innovation to drive sustainability and leverage the leading role that Maersk Drilling has taken through its ambitious strategy and emissions reduction targets and long-term differentiation within the offshore drilling industry;

 

   

the belief that the increased scale and global reach of the combined company will enhance the customer experience and attract investors as the industry continues to recover;

 

   

the belief that the combined company will attract a broader investor base with its diversified revenue mix, a robust balance sheet with low leverage and significant liquidity position, material cash flow generation, and a significant backlog offering revenue and cash flow visibility, providing re-rating potential, and driving investor interest, improved volume and premium trading, and generally improve access to international financing sources;

 

   

the fact that (i) upon Closing, three of the initial seven members of the Topco Board will be designated by Maersk Drilling (including two members designated by APMH Invest), and (ii) following the Closing, and on a going-forward basis, APMH Invest will continue to have the right to designate up to two members of the Topco Board, subject to certain minimum holding conditions; and

 

85


Table of Contents
   

the fact that Maersk Drilling and Noble intend for Topco Shares to be listed on both Nasdaq Copenhagen and the NYSE, providing for global visibility and an enhanced investor base.

Other Factors Considered by the Maersk Drilling Board

In addition to the strategic factors mentioned above, the Maersk Drilling Board considered the following additional material factors, all of which were deemed to support the determination that the Business Combination, the Business Combination Agreement and the transactions contemplated therein were in the best interest of Maersk Drilling and its shareholders, including, but not limited to, the following:

 

   

certain features of the agreed transaction structure for the Business Combination, including (i) the fact that completion of the Business Combination is conditioned upon holders of at least 80% of the then outstanding Maersk Drilling Shares and voting rights of Maersk Drilling tendering their shares in the Offer (which percentage may be lowered by Topco in its sole discretion to not less than 70%); (ii) the fact that Maersk Drilling shareholders would have the opportunity to elect cash consideration for up to $1,000 of their Maersk Drilling Shares (payable in DKK), in lieu of Topco shares as part of the Offer, subject to an aggregate cash consideration cap of $50 million; and (iii) the use of a corporate entity incorporated in the United Kingdom as the holding company and listed entity for the combined company;

 

   

its knowledge of Noble’s business, operations, financial condition, earnings and future prospects, taking into account the results of Maersk Drilling’s due diligence review of Noble;

 

   

the current and prospective industry outlook of the market segments in which Maersk Drilling and Noble operate, and the anticipated movement towards consolidation in the industry generally;

 

   

the fact that under the Business Combination Agreement, Topco has agreed to support the continued operations of Maersk Drilling’s existing North Sea operations and has committed to providing certain benefits with respect to the Maersk Drilling workforce generally for a period of time after completion of the Business Combination, including (but not limited to) certain minimum severance principles;

 

   

the fact that under the Business Combination Agreement, Topco has committed to adopting a rig recycling policy consistent with the existing standards of Maersk Drilling;

 

   

the fact that following Closing, the Maersk Drilling shareholders and Noble shareholders will each own approximately 50% of the outstanding shares of the combined company (calculated on the basis of 66.6 million shares for Noble shareholders (which includes approximately 6.5 million Penny Warrants and excludes dilution from outstanding warrant tranches and share based compensation plans) and assuming that all Maersk Drilling Shares are tendered in the Offer);

 

   

the November 9, 2021 oral opinion of J.P. Morgan delivered to the Maersk Drilling Board, which was confirmed by delivery of a written opinion, dated November 10, 2021, to the effect that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing its opinion, the consideration to be paid to the holders of the Maersk Drilling Shares in the proposed Business Combination was fair, from a financial point of view, to such holders, as more fully described below in the section “—Opinion of Maersk Drilling’s Financial Advisor”. The full text of the written opinion of J.P. Morgan, dated November 10, 2021, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing its opinion, is attached as Annex H to this proxy statement/prospectus and the exchange offer prospectus and is incorporated herein by reference;

 

   

the voting support agreements and irrevocable undertakings in favor of the Business Combination entered into by certain major shareholders of Maersk Drilling and Noble;

 

   

the alternative transactions and strategies that were considered by Maersk Drilling prior to approving this transaction;

 

86


Table of Contents
   

the recommendation of Noble’s Board in favor of the transaction; and

 

   

the expected reaction to the Business Combination by other shareholders, potential and existing investors, customers and other stakeholders.

The Maersk Drilling Board weighed these factors against a number of other factors identified in its deliberations weighing negatively against the transaction, including, but not limited to, the following:

 

   

the risk that completion may not take place within the planned time period or at all, for example if the conditions to completion are not satisfied, including the risk that the Minimum Acceptance Condition is not satisfied, which could result in a failure of the Offer;

 

   

the challenges inherent in the combination of two businesses of the size, geographical diversity and complexity of Maersk Drilling and Noble, including the risk that transaction and integration costs may be greater than projected, expected cost synergies may not be realized, other expected benefits of the Business Combination may not be realized and/or that Topco will not achieve its expected financial results;

 

   

the risk that the pendency of the transaction for an extended period of time could have an adverse impact on the parties, and in particular on Maersk Drilling, including the potential loss of key personnel, impact on Maersk Drilling’s ability to secure revenue backlog (new drilling contracts), and potential distraction of the attention of management and key personnel;

 

   

the possibility that Maersk Drilling and Noble may lose key personnel (in particular as a consequence of the fact that the combined company will have its headquarters in Houston, Texas) and the ability for Maersk Drilling and Noble to sustain relationships with particular customers;

 

   

the possibility that the combined company will be unwilling or unable to maintain Maersk Drilling’s existing business model, which is key to certain of Maersk Drilling’s existing customer relationships;

 

   

the risk that regulatory approvals necessary to consummate the Business Combination may be delayed or not granted, which may delay or jeopardize the Business Combination, or that a regulatory or other body imposes restrictions or divestitures on the Business Combination, compliance with which would be necessary but could adversely impact the business of Maersk Drilling, Noble or the combined company;

 

   

the fact that certain provisions of the Business Combination Agreement may have the effect of discouraging alternative business combination transactions involving Maersk Drilling, including that the agreement prohibits Maersk Drilling from soliciting or engaging in discussions regarding alternative transactions during the pendency of the transaction and that in the event that the Maersk Drilling Board withholds, withdraws or changes its recommendation to the Maersk Drilling shareholders in favor of the transaction or in certain other events, Noble will have the ability to terminate the Business Combination Agreement and receive a termination fee of $15 million from Maersk Drilling;

 

   

the potential that the fixed exchange ratio under the Business Combination Agreement could result in Maersk Drilling delivering greater value to the Noble shareholders than had been anticipated by Maersk Drilling should the value of Maersk Drilling Shares increase relative to Noble Shares after the date of execution of the Business Combination Agreement; and

 

   

the risks of the type and nature described under the section entitled “Risk Factors” of this proxy statement/prospectus and the exchange offer prospectus and the matters described under “Cautionary Note Regarding Forward-Looking Statements” of this proxy statement/prospectus and the exchange offer prospectus.

The foregoing discussion of the factors considered by the Maersk Drilling Board is not intended to be exhaustive, but rather includes the principal factors considered by the Maersk Drilling Board. In view of the wide

 

87


Table of Contents

variety of factors considered in connection with its evaluation of the transaction and the complexity of these matters, the Maersk Drilling Board did not find it useful and did not attempt to quantify or assign any relative or specific weights to the various factors that it considered in reaching its decision to approve the Business Combination Agreement and the transactions contemplated thereby, and the factors identified above are not therefore listed in any particular order. In addition, individual members of the Maersk Drilling Board may have given differing weights to different factors. The Maersk Drilling Board conducted an overall review of the factors described above, including through discussions with Maersk Drilling’s management and outside legal and financial advisors. The explanation and reasoning of the Maersk Drilling Board and certain information presented in this section are forward-looking in nature and should be read in light of the factors discussed in the section “Cautionary Note Regarding Forward-Looking Statements”.

Projections Prepared by Noble’s Management

For internal planning purposes and in connection with its consideration of the proposed transaction prior to entering into the Business Combination Agreement and the public announcement of the proposed transaction, Noble’s management prepared forecasts of expected future financial and operating performance of Noble (as used in this section, the “Noble financial forecasts”) and of Maersk Drilling (as used in this section, the “financial forecasts for Maersk Drilling”). These forecasts were for multiple years and consisted of two cases, Case A and Case B. Case A and Case B are consistent with the exception of Case A reflecting lower dayrates for harsh environment jackups and lower rig activity in Norway. Select material line items for certain periods from the Noble financial forecasts and Noble’s management’s financial forecasts for Maersk Drilling, as well as material operating assumptions underlying such forecasts, are set forth below.

The primary market assumptions underlying Case A and Case B included the (a) recovery of project economics for new developments to pre-COVID-19 levels in 2022 and (b) rig attrition / retirement continuing to occur over the forecast period, with a number of floaters and jackups permanently removed from the market.

For Case A and Case B, Noble assumed (i) improving utilization from 2021 and a gradual dayrate recovery starting in 2021 leading to a stronger dayrate recovery in 2023 and beyond for jackups, and (ii) improving utilization from 2021 and a robust dayrate recovery starting in 2022 and beyond for floater rigs.

The Noble financial forecasts and Noble’s management’s financial forecasts for Maersk Drilling were based on a variety of assumptions and estimates made at the time that such financial forecasts were prepared. The assumptions and estimates underlying such forecasts may not be realized and are inherently subject to significant business, economic and competitive uncertainties and contingencies, all of which are difficult to predict and many of which are beyond Noble’s and Maersk Drilling’s control. The assumptions and estimates used to create the Noble financial forecasts and Noble’s management’s financial forecasts for Maersk Drilling involve judgments made with respect to, among other things, revenue growth, drilling activity in the oil and gas sector, future supply, demand and prices of commodities including crude oil and natural gas, general domestic and foreign economic, regulatory and political conditions, levels of operating expenses and matters specific to the businesses of Noble and Maersk Drilling, all of which are difficult to predict and many of which are outside of Noble’s and Maersk Drilling’s control. The Noble financial forecasts and Noble’s management’s financial forecasts for Maersk Drilling also reflect assumptions as to certain business decisions that are subject to change and that do not reflect any of the effects of the transaction, or any other changes that may in the future affect Noble, Maersk Drilling or their assets, business, operations, properties, policies, corporate structure, capitalization and management as a result of the transaction or otherwise.

Noble’s management, after discussions with Maersk Drilling, also estimated the timing and amount of projected realization of annual savings from pre-tax cost synergies for the combined company. The synergies are not reflected in the Noble financial forecasts or Noble’s management’s financial forecasts for Maersk Drilling.

The inclusion of the Noble financial forecasts and Noble’s management’s financial forecasts for Maersk Drilling in this proxy statement/prospectus and the exchange offer prospectus should not be regarded as an

 

88


Table of Contents

indication that Noble, Maersk Drilling or any of their respective advisors or representatives considered or consider such forecasts to be an accurate prediction of future events or that such forecasts will be achieved, and the Noble financial forecasts and Noble’s management’s financial forecasts for Maersk Drilling should not be relied upon as such. None of Noble, Maersk Drilling or their respective advisors or representatives has made or makes any representation regarding the information contained in the Noble financial forecasts or Noble’s management’s financial forecasts for Maersk Drilling, and, except as may be required of Noble or Maersk Drilling by applicable securities laws, none of them intends to update or otherwise revise or reconcile such forecasts to reflect circumstances existing after the date they were generated or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the Noble financial forecasts or Noble’s management’s financial forecasts for Maersk Drilling are shown to be in error.

Noble and Maersk Drilling shareholders are cautioned not to place undue reliance on the Noble financial forecasts and Noble’s management’s financial forecasts for Maersk Drilling included in this proxy statement/prospectus and the exchange offer prospectus, and such projected financial information should not be regarded as an indication that Noble, the Noble Board or any other person considered, or now considers, them to be reliable predictions of future results, and they should not be relied upon as such.

Although presented with numerical specificity, the Noble financial forecasts and Noble’s management’s financial forecasts for Maersk Drilling are not fact and reflect numerous assumptions, estimates and judgments as to future events and the probability of such events made by Noble’s management, including the assumptions, estimates and judgments noted below. Since the Noble financial forecasts and Noble’s management’s financial forecasts for Maersk Drilling cover multiple years, such information by its nature becomes less predictive with each successive year. There can be no assurance that the assumptions, estimates and judgments used to prepare the Noble financial forecasts and Noble’s management’s financial forecasts for Maersk Drilling will prove to be accurate, and actual results may differ materially from those contained in such forecasts. The Noble financial forecasts and Noble’s management’s forecasts for Maersk Drilling are forward-looking statements. Please see “Cautionary Statement Regarding Forward-Looking Statements.”

The Noble financial forecasts and Noble’s management’s forecasts for Maersk Drilling were prepared by Noble in connection with the proposed transaction prior to execution of the Business Combination Agreement.

These financial forecasts were prepared by, and are the responsibility of, Noble’s management. Neither PricewaterhouseCoopers LLP, Noble’s independent registered public accounting firm, nor any other independent accountant, have audited, reviewed, examined, compiled nor applied agreed-upon procedures with respect to the Noble financial forecasts or Noble’s management’s forecasts for Maersk Drilling and, accordingly, neither PricewaterhouseCoopers LLP nor any other independent accountants express an opinion or any other form of assurance with respect thereto. The report of PricewaterhouseCoopers LLP incorporated by reference in this proxy statement/prospectus and the exchange offer prospectus relates to Noble’s previously issued financial statements. The foregoing report does not extend to the Noble financial forecasts or Noble’s management’s forecasts for Maersk Drilling and should not be read to do so.

In addition to being used by the Noble Board in connection with its deliberations regarding the transaction, the Noble and Noble’s management’s financial forecasts for Maersk Drilling were provided to Ducera. Selected Noble financial forecast information for the last quarter of fiscal year 2021 and the year ending December 31, 2022 was provided to Maersk Drilling. The Noble financial forecasts were prepared for use only by the Noble Board, Noble, Ducera and, only with respect to selected Noble financial forecast for the last quarter of fiscal year 2021 and the year ending December 31, 2022, Maersk Drilling. Noble’s management’s financial forecasts for Maersk Drilling were prepared by Noble’s management for use only by the Noble Board, Noble and Ducera.

Summary of Noble Financial Forecasts and Noble’s management’s financial forecasts for Maersk Drilling

The Noble financial forecasts and Noble’s management’s financial forecasts for Maersk Drilling include projected information at the individual rig level and consolidated financial projections through the remaining

 

89


Table of Contents

useful life of the existing Noble and Maersk Drilling fleets (through 2046 and 2047, respectively). However, Noble believes that operating assumptions beyond a five-year period (beyond 2026) may not be meaningful to current and potential shareholders because such information becomes less predictive with each successive year. Noble assumed mid-cycle operating assumptions starting in 2026, and carried those assumptions forward for all remaining operating years for any drilling rigs with a remaining useful life beyond 2026. The tables below present summaries of select material line items and material operating assumptions with respect to (a) in the case of the Noble financial forecasts, the last quarter of fiscal year 2021, each fiscal year during the period from 2022 through 2026 and the fiscal years from 2027 through 2046 in the aggregate, and (b) in the case of Noble’s management’s financial forecasts for Maersk Drilling, the last quarter of fiscal year 2021, each fiscal year during the period from 2022 through 2026 and the fiscal years from 2027 through 2047 in the aggregate.

 

    Noble Case A ($ in millions, except Average Dayrate)  
    Three months
ending
December 31,
2021
    2022     2023     2024     2025     2026     Remaining
Useful Life
 

Total Revenue

  $ 230     $ 1,101     $ 1,096     $ 1,189     $ 1,305     $ 1,265     $ 18,605  

Adjusted EBITDA(1)

    22       316       333       419       515       456       6,733  

Capital Expenditures

    (59     (120     (130     (121     (111     (119     (1,869

Unlevered Free Cash
Flow(2)

    279       196       199       271       359       327       4,628  

Assumptions:

             

Average Utilization(3)

    69.9     83.2     87.3     90.7     92.4     90.3     87.5

Average Dayrate (4)

  $ 162,731     $ 177,772     $ 187,234     $ 207,493     $ 228,408     $ 226,192     $ 245,948  

 

    Noble Case B ($ in millions, except Average Dayrate)  
    Three months
ending
December 31,
2021
    2022     2023     2024     2025     2026     Remaining
Useful Life
 

Total Revenue

  $ 230     $ 1,101     $ 1,096     $ 1,189     $ 1,313     $ 1,273     $ 18,764  

Adjusted EBITDA(1)

    22       316       333       419       524       465       6,891  

Capital Expenditures

    (59     (120     (130     (121     (111     (119     (1,869

Unlevered Free Cash
Flow(2)

    279       196       199       271       365       335       4,774  

Assumptions:

             

Average Utilization(3)

    69.9     83.2     87.3     90.7     92.4     90.3     87.5

Average Dayrate(4)

  $ 162,731     $ 177,772     $ 187,234     $ 207,493     $ 229,925     $ 227,745     $ 248,113  
 

 

 

             

 

    Noble Projections: Maersk Drilling Case A ($ in millions, except Average Dayrate)  
    Three months
ending
December 31,
2021
    2022     2023     2024     2025     2026     Remaining
Useful Life
 

Total Revenue

  $ 278     $ 1,096     $ 1,193     $ 1,385     $ 1,500     $ 1,499     $ 21,109  

Adjusted EBITDA(1)

    45       224       297       447       545       520       7,130  

Capital Expenditures

    (46     (130     (143     (295     (144     (102     (1,497

Unlevered Free Cash
Flow(2)

    380       61       134       115       352       370       5,020  

Assumptions:

             

Average Utilization(3)

    65.6     82.5     83.0     90.1     91.0     90.8     88.2

Average Dayrate(4)

  $ 193,858     $ 168,290     $ 187,611     $ 210,458     $ 228,904     $ 229,190     $ 254,858  
 

 

 

             

 

90


Table of Contents
    Noble Projections: Maersk Drilling Case B ($ in millions, except Average Dayrate)  
    Three months
ending
December 31,
2021
    2022     2023     2024     2025     2026     Remaining
Useful Life
 

Total Revenue

  $ 278     $ 1,096     $ 1,193     $ 1,433     $ 1,586     $ 1,586     $ 22,641  

Adjusted EBITDA(1)

    45       224       297       474       609       583       8,263  

Capital Expenditures

    (46     (130     (143     (295     (144     (102     (1,497

Unlevered Free Cash
Flow(2)

    380       61       134       140       411       427       6,039  

Assumptions:

             

Average Utilization(3)

    65.6     82.5     83.0     90.4     91.3     91.1     88.5

Average Dayrate(4)

  $ 193,858     $ 168,290     $ 187,611     $ 218,159     $ 243,132     $ 243,441     $ 274,529  
 

 

 

             

 

(1)

Adjusted EBITDA is net income (loss) from continuing operations before income taxes; interest income and other, net; gain (loss) on extinguishment of debt, net; interest expense, net of amounts capitalized; loss on impairment; reorganization items, net; certain corporate legal expenses and depreciation and amortization expense.

(2)

Unlevered free cash flow is Adjusted EBITDA less capital expenditures, cash taxes and any changes in net working capital plus stock based compensation and proceeds from the sale of assets (including Noble’s recent transaction with ADES International Holding or Maersk Drilling’s recent transaction with Havila Sirius, as applicable).

(3)

Utilization for a specific period is the total number of days rigs are operating under contract, divided by the product of the total number of rigs, including cold stacked rigs, and the number of calendar days in such period.

(4)

An operating day is defined as a calendar day during which a rig operated under a drilling contract. Average dayrate is revenue from contract drilling services (excluding revenue from integrated services and mobilization fees) earned per operating day (excluding unpaid downtime). Average dayrates have not been adjusted for the non-cash amortization related to favorable customer contract intangibles.

The Noble financial forecasts and Noble’s management’s financial forecasts for Maersk Drilling should be read together with the historical financial statements of Noble and Maersk Drilling respectively and the other information regarding Noble and Maersk Drilling contained elsewhere in this proxy statement/prospectus and the exchange offer prospectus. None of the Noble financial forecasts or Noble’s management’s forecasts for Maersk Drilling were prepared with a view toward public disclosure, nor were they prepared with a view toward compliance with the published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of projections.

Projections Prepared by Maersk Drilling’s Management

Although Maersk Drilling publicly issues limited short-term guidance concerning certain aspects of its expected financial performance, it does not, as a matter of course, publicly disclose financial projections due to, among other reasons, the uncertainty, unpredictability and subjectivity of the underlying assumptions and estimates. As a result, Maersk Drilling does not endorse unaudited projections as a reliable indication of future results. The limited unaudited projections set out below are included in this proxy statement/prospectus and exchange offer prospectus solely because they were among the financial information prepared by Maersk Drilling’s management and made available to the Maersk Drilling Board in connection with its evaluation of the proposed transaction prior to Maersk Drilling’s entry into the Business Combination Agreement and the public announcement of the proposed transaction and to J.P. Morgan as Maersk Drilling’s financial advisor to use and rely upon such projections for purposes of its opinion and related financial analyses. These projections were prepared in connection with the proposed transaction prior to execution of the Business Combination Agreement and were based on a variety of assumptions and estimates made at the time the projections were prepared. Such unaudited projections should not be viewed or construed as public guidance, and should not be relied upon as such.

 

91


Table of Contents

The inclusion of these unaudited projections should not be regarded as an indication that any of Maersk Drilling, Noble, their respective financial advisors or any of their respective affiliates, officers, directors, partners, advisors or other representatives considered, or now considers, such projections to be an accurate prediction of actual future results, and readers of this proxy statement/prospectus are cautioned not to rely on this forward-looking information. There can be no assurance that the forward-looking results will be achieved or that actual results will not be significantly higher or lower than estimated. None of Maersk Drilling, Noble or their respective advisors or representatives has made or makes any representation regarding the information contained in the Maersk Drilling financial projections or Maersk Drilling’s management’s financial projections for Noble, and, except as may be required of Maersk Drilling or Noble by applicable securities laws, none of them intends to update or otherwise revise or reconcile such projections to reflect circumstances existing after the date they were generated or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the Maersk Drilling financial projections or Maersk Drilling’s management’s financial projections for Noble are shown to be in error.

The unaudited projections presented below were prepared in connection with the proposed transaction prior to execution of the Business Combination Agreement and include Maersk Drilling’s management’s projections of the expected future financial and operating performance of Maersk Drilling (as used in this section, the “Maersk Drilling financial projections”) and of Noble (as used in this section, the “financial projections for Noble”) at the time such projections were prepared. These projections comprised detailed projections for an initial five-year period (2021 through and including 2025) and high-level, long-range projections for each year through the end of the useful lives of each of the parties’ assets (2026 through and including 2042). Select material line items for certain periods from the Maersk Drilling financial projections and Maersk Drilling’s management’s financial projections for Noble, as well as material operating assumptions underlying such projections, are set forth below.

The primary assumptions underlying Maersk Drilling’s management’s financial projections included (a) for the initial five-year period, day rates, utilization, uptime, operating and capital expenditures and SG&A, and (b) for the long-range projections, a long-term EBITDA margin assumption, in turn based on estimated through-cycle level of financial performance and the parties’ respective operating expenditure and SG&A cost bases, and capital expenditures. Maersk Drilling’s management assumed (i) improving utilization from 2022 and generally consistent utilization from 2023 through 2025, supporting a gradual dayrate recovery across the period for jack-ups, and (ii) improving utilization from 2021 and a robust dayrate recovery starting in 2022 and beyond for floater rigs. Uptime, the ratio of hours that can be invoiced for as a percentage of total hours in the period under contract with the customer, was assumed to be 99.0% for jack-ups and 98.0% for floater rigs throughout the initial five-year period, in line with historical averages. Maersk Drilling’s management modelled operating and capital expenditures on a rig-by-rig, bottom-up basis for each of the Maersk Drilling and Noble portfolios, while SG&A and support costs were modelled on a portfolio basis, accounting for the assumed phase-out of each rig at the end of its estimated operating life.

The Maersk Drilling financial projections and Maersk Drilling’s management’s financial projections for Noble were based on a variety of assumptions and estimates made at the time that such financial projections were prepared. The assumptions and estimates underlying such projections may not be realized and are inherently subject to significant business, economic and competitive uncertainties and contingencies, all of which are difficult to predict and many of which are beyond Maersk Drilling’s and Noble’s control. The assumptions and estimates used to create the Maersk Drilling financial projections and Maersk Drilling’s management’s financial projections for Noble involve judgments made with respect to, among other things, drilling activity in the oil and gas sector including relevant dayrates and rig supply-demand dynamics, future supply, demand and prices of commodities including crude oil and natural gas, general domestic and foreign economic, regulatory and political conditions, levels of operating and capital expenditures as well as SG&A and support costs and matters specific to the businesses of Maersk Drilling and Noble, all of which are difficult to predict and many of which are outside of Maersk Drilling’s and Noble’s control. The Maersk Drilling financial projections and Maersk Drilling’s management’s financial projections for Noble also reflect assumptions as to certain business decisions that are subject to change and that do not reflect any of the effects of the transaction, or any other changes that

 

92


Table of Contents

may in the future affect Maersk Drilling, Noble or their respective assets, business, operations, properties, policies, corporate structure, capitalization and management as a result of the transaction or otherwise.

Maersk Drilling’s management, after discussions with Noble, also estimated the timing and amount of projected realization of annual savings from pre-tax cost synergies for the combined company. Any cost synergies (and the related costs necessary to achieve any such synergies) are not reflected in the Maersk Drilling financial projections or Maersk Drilling’s management’s financial projections for Noble.

Maersk Drilling and Noble shareholders are cautioned not to place undue reliance on the Maersk Drilling financial projections and Maersk Drilling’s management’s financial projections for Noble included in this proxy statement/prospectus and the exchange offer prospectus, and such projected financial information should not be regarded as an indication that Maersk Drilling, the Maersk Drilling Board or any other person considered, or now considers, them to be reliable predictions of future results, and they should not be relied upon as such.

Although presented with numerical specificity, the Maersk Drilling financial projections and Maersk Drilling’s management’s financial projections for Noble are not fact and reflect numerous assumptions, estimates and judgments as to future events and the probability of such events made by Maersk Drilling’s management, including the assumptions, estimates and judgments noted above. Since the Maersk Drilling financial projections and Maersk Drilling’s management’s financial projections for Noble cover multiple years, such information by its nature becomes less predictive with each successive year. There can be no assurance that the assumptions, estimates and judgments used to prepare the Maersk Drilling financial projections and Maersk Drilling’s management’s financial projections for Noble will prove to be accurate, and actual results may differ materially from those contained in such projections. The Maersk Drilling financial projections and Maersk Drilling’s management’s financial projections for Noble are forward-looking statements. Please see “Cautionary Statement Regarding Forward-Looking Statements.”

The Maersk Drilling financial projections and Maersk Drilling’s management’s financial projections for Noble were prepared by Maersk Drilling in connection with the proposed transaction prior to execution of the Business Combination Agreement. These financial projections were prepared by, and are the responsibility of, Maersk Drilling’s management. Neither PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab, Maersk Drilling’s independent registered public accounting firm, nor any other independent accountant, have audited, reviewed, examined, compiled nor applied agreed-upon procedures with respect to the Maersk Drilling financial projections or Maersk Drilling’s management’s financial projections for Noble and, accordingly, neither PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab nor any other independent accountants express an opinion or any other form of assurance with respect thereto. The report of PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab included in this proxy statement/prospectus and the exchange offer prospectus relates to Maersk Drilling’s previously issued financial statements. The foregoing report does not extend to the Maersk Drilling financial projections or Maersk Drilling’s management’s financial projections for Noble and should not be read to do so.

In addition to being used by the Maersk Drilling Board in connection with its deliberations regarding the transaction, the Maersk Drilling financial projections and Maersk Drilling’s management’s financial projections for Noble were provided to J.P. Morgan. Selected Maersk Drilling financial projections for the second half of fiscal year 2021 and the year ending December 31, 2022 were provided to Noble. The Maersk Drilling financial projections were prepared for use only by the Maersk Drilling Board, Maersk Drilling, J.P. Morgan and, with respect to selected Maersk Drilling financial projection information for the second half of fiscal year 2021 and the year ending December 31, 2022 only, Noble. Maersk Drilling’s management’s financial projections for Noble were prepared by Maersk Drilling’s management for use only by the Maersk Drilling Board, Maersk Drilling and J.P. Morgan.

Summary of Maersk Drilling financial projections and Maersk Drilling’s management’s financial projections for Noble

The Maersk Drilling financial projections and Maersk Drilling’s management’s financial projections for Noble include projected information at the individual rig level and consolidated financial projections through the

 

93


Table of Contents

end of the estimated useful lives of the existing Maersk Drilling and Noble fleets (through 2042). However, Maersk Drilling believes that operating assumptions beyond a five-year period (i.e., beyond 2025) may not be meaningful to current and potential shareholders because such information becomes less predictive with each successive year. Maersk Drilling based such projections on a long-term EBITDA margin assumption of 40.0%, itself based on an estimated through-cycle level of financial performance and the parties’ respective operating expenditure and SG&A cost bases, applying such an assumption to each of the Maersk Drilling financial projections and Maersk Drilling’s management’s projections for Noble from 2026 through the end of the estimated useful lives of the existing Maersk Drilling and Noble fleets. The tables below present summaries of select material line items and material operating assumptions with respect to (a) in the case of the Maersk Drilling financial projections, the second half of fiscal year 2021, each fiscal year during the period from 2022 through 2025, and the fiscal years from 2026 through 2042 in the aggregate, and (b) in the case of Maersk Drilling’s management’s financial projections for Noble, the second half of fiscal year 2021, each fiscal year during the period from 2022 through 2025, and the fiscal years from 2026 through 2042 in the aggregate.

 

     Maersk Drilling financial projections (Management Projections)
($ in millions, except Average Dayrate)
 
     Six months
ending
December 31,
2021
        2022             2023             2024             2025         Remaining
Useful Life
 

Total Revenue

   $ 613     $ 1,088     $ 1,220     $ 1,376     $ 1,455     $ 18,113  

Operating Expenditures

     (370     (690     (780     (833     (847     (9,531

SG&A

     (68     (128     (131     (121     (121     (1,336

EBITDA(1)

     138       240       309       369       435       7,245  

Capital Expenditures

     (79     (119     (150     (281     (129     (1,220

Unlevered Free Cash Flow(2)

     467       70       117       34       262       5,325  

Assumptions:

            

Average Utilization(3)

            

Jack-ups

     78     75     82     82     80  

Floaters

     83     85     87     85     84  

Average Dayrate(4)

            

Jack-ups

   $ 169     $ 118     $ 123     $ 153     $ 171    

Floaters

   $ 210     $ 214     $ 262     $ 292     $ 297    
     Maersk Drilling’s management’s financial projections for Noble (Management Projections)
($ in millions, except Average Dayrate)
 
     Six months
ending
December 31,
2021
        2022             2023             2024             2025         Remaining
Useful Life
 

Total Revenue

   $ 410     $ 957     $ 980     $ 1,088     $ 1,152     $ 16,085  

Operating Expenditures

     (313     (590     (630     (657     (655     (8,404

SG&A

     (54     (97     (97     (97     (97     (1,247

EBITDA(1)

     43       269       253       333       399       6,434  

Capital Expenditures

     (96     (103     (262 )(5)      (133     (131     (1,638

Unlevered Free Cash Flow(2)

     230       88       (30     150       216       4,264  

Assumptions:

            

Average Utilization(3)

            

Jack-ups

     68     76     79     79     78  

Floaters

     71     77     79     83     83  

Average Dayrate(4)

            

Jack-ups

   $ 87     $ 99     $ 106     $ 116     $ 125    

Floaters

   $ 201     $ 240     $ 232     $ 249     $ 263    
            

 

(1)

EBITDA is profit (loss) from continuing operations before tax taxes; financial expenses, net; share of results in joint ventures; gain (loss) on sale of non-current assets; impairment reversals (losses), net; depreciation and amortization and unallocated activities.

 

94


Table of Contents
(2)

Unlevered free cash flow is EBITDA less cash taxes, capital expenditures, changes in net working capital and other non-recurring items and includes proceeds from the sale of assets (including Maersk Drilling’s recent transaction with Havila Sirius or Noble’s recent transaction with ADES International Holding, as applicable).

(3)

Utilization for a specific period is the total number of days rigs are operating under contract, divided by the product of the total number of rigs, including cold stacked rigs, and the number of calendar days in such period.

(4)

Average dayrate is revenue from contract drilling services (excluding revenue from integrated services and mobilization fees) earned per operating day (excluding unpaid downtime). An operating day is defined as a calendar day during which a rig operated under a drilling contract.

(5)

2023 capital expenditures estimate assumes the reactivation of two cold stacked rigs.

The Maersk Drilling financial projections and Maersk Drilling’s management’s financial projections for Noble should be read together with the historical financial statements of Maersk Drilling and Noble, respectively, and the other information regarding Maersk Drilling and Noble contained elsewhere in this proxy statement/prospectus and the exchange offer prospectus. None of the Maersk Drilling financial projections or Maersk Drilling’s management’s financial projections for Noble were prepared with a view toward public disclosure, nor were they prepared with a view toward compliance with the published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for the preparation and presentation of prospective financial information.

MAERSK DRILLING HAS NOT UPDATED OR OTHERWISE REVISED AND DOES NOT INTEND TO UPDATE OR OTHERWISE REVISE FOR PURPOSES OF THIS PROXY STATEMENT/PROSPECTUS THE ABOVE UNAUDITED PROJECTIONS TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE PREPARED OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING SUCH UNAUDITED PROJECTIONS ARE NO LONGER APPROPRIATE, EXCEPT AS MAY BE REQUIRED BY LAW.

Opinion of Noble’s Financial Advisor

Ducera was retained by Noble to act as its financial advisor in connection with the Business Combination. Noble selected Ducera to act as its financial advisor based on Ducera’s qualifications, expertise, reputation and judgment, Ducera’s relationship with Noble arising from Ducera’s financial advisory services provided to the ad hoc group of priority guaranteed noteholders of Noble in Noble’s 2020 Chapter 11 restructuring (the “Noble Restructuring”) and Ducera’s provision of financial advisory services to Noble and its affiliates in connection with Noble’s acquisition of Pacific Drilling Company LLC, and Ducera’s understanding of Noble’s business. At the November 9, 2021 meeting of the Noble Board, Ducera delivered its oral opinion to the Noble Board, which was subsequently confirmed in writing, to the effect that, as of the date of such opinion, and subject to the assumptions, limitations, qualifications and conditions described in such opinion, the Merger Consideration was fair, from a financial point of view, to the holders of Noble Shares (other than Noble Shares held by Maersk Drilling or its affiliates).

The full text of the written opinion of Ducera, dated as of November 9, 2021, is attached as Annex G to this proxy statement/prospectus and the exchange offer prospectus. The opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications, conditions and limitations on the scope of the review undertaken by Ducera in rendering its opinion. Ducera’s opinion is directed to the Noble Board and addresses only the fairness, from a financial point of view, of the Merger Consideration to the holders of Noble Shares (other than Noble Shares held by Maersk Drilling or its affiliates). It does not constitute a recommendation to the Noble Board or to any other persons in respect of the Business Combination, including as to how any holder of Noble Shares should vote or act in respect of the Merger. The summary of the opinion of Ducera set forth below is qualified in its entirety by reference to the full text of the opinion, which holders of Noble Shares are encouraged to read carefully and in its entirety.

 

95


Table of Contents

In connection with rendering its opinion, Ducera, among other things:

 

   

reviewed a draft of the Business Combination Agreement dated as of November 8, 2021;

 

   

reviewed certain publicly available financial statements and other business and financial information relating to Noble and Maersk Drilling which Ducera believed to be relevant;

 

   

reviewed certain non-public historical financial statements and other non-public historical financial and operating data relating to Noble prepared and furnished to Ducera by management of Noble;

 

   

reviewed certain non-public historical financial statements and other non-public historical financial and operating data relating to Maersk Drilling prepared by Maersk Drilling and furnished to Ducera by management of Noble;

 

   

reviewed certain non-public projected financial data relating to Noble prepared and furnished to Ducera by management of No