Dual Allegiances

Reversing a “dual” pronged strategy which combined shipping and offshore drilling, Mosvold Shipping AS is now dusting off its offshore assets, and managing directors are involved in informal discussions with brokers and other potential investors for the sale of its stake in Dual Drilling Company.

“Based on the prevailing situation, the Board of Directors has now reached the conclusion that it will be in the shareholders’ interest to alter the objective of long-term rise in values (in offshore drilling) to a strategy where focus is placed on realizing the values on a short-term basis,” a recent memorandum from the Board read.

The prevailing situation to which the memorandum referred is B. Skaugen Shipping’s sudden stock purchase, which put more than 40% of Mosvold control in Skaugen’s hands.

The old strategy, to diversify and expand its market base, was embodied by the 1990 purchase of 100% of Dual Drilling, a US-based international drilling outfit with 21 rigs. Following Dual’s IPO last year, Mosvold’s stake fell to 59.4%, but its exposure remained basically unchanged, accounting for approximately 90% of Mosvold’s operating income and 80% of its consolidated total assets.

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