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Buying Shares – Seadrill and Golar LNG Buyback Shares

The Fredriksen companies have been busy buying shares lately as a result of certain triggering events. In the case of Seadrill, the parity value of the five year convertible bond issue due in 2012 exceeded 130% of par value for at least 20 days out of a period of 30 consecutive trading days allowing Seadrill to redeem the bond at par plus accrued interest. This, in turn, will likely result in the bondholders exercising their conversion rights. Of the original $1 billion, there is $749.5 million in bonds outstanding. Should all the bondholders convert all the remaining bonds at the $27.80 conversion price (Wednesday’s closing price was $33.59, making the exercise a no brainer), Seadrill will have to issue approximately 27 million new shares. In order to reduce the total outstanding number of shares, Seadrill began to repurchase shares and has since acquired 1.65 million shares at an average price of NOK 184.11 bringing its holdings of treasury shares to approximately 1.8 million.

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