Second green bond, rig sale resurfaces
Second green bond, rig sale resurfacesSIGNIFICANT NEWS
The company is issuing a €2m green bond and is separating the conventional and renewable activities. The latter was already announced early last year, yet it seems that the improving environment in oil & gas explains this restart. The stock is up 15%, after a volatile November, and, in our view, due to the company issuing the €2m bond instead of using the OCABSA line.
FACT
Legal separation of the oil & gas activities and renewables activities
Issuance of a €2m green bond:
2-year maturity, repayable monthly, annual coupon 12% payable monthly
Conversion price €0.50 per share (from July 2022 to November 2023)
ANALYSIS
On the separation of the two businesses, we do not believe this will lead to an independent listing of the renewables business. All in all, there seems to be limited interactions between the audit & inspection division and the renewables one, hence the split should have no consequences on the business.
The separation was announced in March 2020, and it may have been on hold during the challenging 2020. Yet, the improving environment in oil & gas, as highlighted by the recovery witnessed in H1, justifies the restart of this process. As further evidence of the latter, a potential sale of the Rig Sedlar resurfaces. As a reminder, the rig was built in 2007 and written down to zero in 2019.
On the €2m bond issuance, beside the conversion price, the financial terms are similar to the first one issued early this year. Conversion of the bod would lead to the creation of 4 million shares.
Dietswell. Dietswell SA is a France-based company that provides drilling operation management services for the oil industry. The Company specializes in the design, drilling, work-over and completion engineering. It offers well engineering services, such as well engineering, preparation and evaluation of tenders, offset wells reviews; drilling project management, management of the stock of spare parts, supply of communications and logistic support, among others; drilling contracting; rig design and contracting, which designs, constructs and refurbish rigs; rig inspection and audits, which provide customized inspection and audit services; and provision of technical assistance. Dietswell SA principally provides its services to ageing oilfields that need updating, or that need to be decommissioned in an environmentally friendly manner. The Company holds stakes in two companies: Dolfines Logistique and Feumag Holding Company Limited. In October 2013, it announced the creation of Dietswell Brazil.
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