Sevan Marine Jumps on Report of Financing for Vessels

By Vibeke Laroi

Sept. 17 (Bloomberg) -- Sevan Marine ASA gained in Oslo trading after Dagens Naeringsliv said the builder of offshore floating units for the oil industry is close to securing financing for two vessels.

Sevan Marine jumped 1.4 kroner, or 6.2 percent, to 24.1 kroner, after climbing as much as 20 percent in earlier trading, the most since the shares were first sold in November 2004.

Dagens Naeringsliv said the company had secured commitments from General Electric Co. and BNP Paribas SA to finance two of its vessels, citing Chief Executive Officer Jan Erik Tveteraas. Sevan Marine expects to reach an agreement ``shortly,'' he said, according to the Oslo-based newspaper.

The cost of upgrading Sevan's two vessels for drilling operations would be $1.4 billion to $1.5 billion, of which 70 percent is expected to be financed through borrowing and the remainder through equity, the newspaper reported. The vessels have been hired by India's Oil & Natural Gas Corp. and Brazil's Petroleo Brasileiro SA, Dagens Naeringsliv said.

Tveteraas wasn't immediately available for comment when contacted by Bloomberg News.

Sevan Marine plunged as much as 28 percent yesterday before closing down 18 percent at 22.7 kroner as crude oil slumped to a seven-month low amid the worsening global credit crisis. The shares are down 68 percent this year.

Turnaround

``An announcement of an industrial partner and debt facilities could trigger a turnaround,'' Carnegie ASA analyst Frederik Lunde wrote in a note today.

The shares were also boosted by a report in The Economic Times of India that Jindal Drilling & Industries Ltd. is in talks with Sevan to form a $700 million joint venture to construct a deepwater rig, according to Lunde.

If the deal goes through, Sevan Marine would hold a 75 percent stake in the venture while Jindal would own the remainder, the newspaper reported on its Web site.

``This implies a $50 million equity infusion from Jindal,'' Lunde wrote in the research note. New Delhi-based Jindal drills for oil and gas.

To contact the reporter on this story: Vibeke Laroi in Oslo at vlaroi@bloomberg.net