(Correction: In an earlier version of this case, Sveaas’ gain was calculated at over NOK 700 million. This calculation did not take into account a share split in Borr in December 2021, which led to the number of shares being divided by two.)
It cannot be described as anything other than a gold-edged investment: since Christen Sveaas surprisingly appeared as a shareholder in Tor Olav Trøim’s rig company Borr Drilling two years ago, the share has quadrupled in value.
The billionaire’s investment company Kistefos invested just over NOK 100 million in what was then another capital raising for a pressed Borr, which was struggling with debt and was completely dependent on raising money again to get the creditors on board. Kistefos now has a solid paper profit of over NOK 300 million.
The question is when Sveaas, who has described Borr as a “financial investment,” intends to take a profit.
An answer may have come on Friday: Kistefos has sold 15,000 shares, i.e. a fraction of the holding of over 14 million shares. What is interesting is how much the investor is left with: The sale takes him below the five percent limit, from 5.14 to 4.99 percent. In practice, this means that Kistefos does not need to send any flag messages for any future sales if the stock is not increased again.
Kistefos boss Bengt A. Rem has no comment beyond what appears in the flag message, he says in an email on Monday.
Carrying out a small transaction that takes one just above or just below these limits, which goes at five, ten, 15 percent and several important thresholds further upwards, is a frequently used method for investors, who can thus carry out the largest trades in a sell-off – or acquisition process without having to publish the information to the public.
A series of issues
It caused a stir when Sveaas flagged that he had taken about a quarter of the entire issue Borr carried out on 22 January 2021.
The backdrop was a very strained situation for the rig company, which Trøim founded in 2016, roughly at the worst of the crisis in the oil service sector that followed the drop in oil prices that began a couple of years earlier. Trøim and the co-investors in Borr vacuumed the market for cheap so-called jack-up rigs, and the plan was to hit the upswing that had to come with a modern and attractive fleet when the oil companies found out that it was time to drill again.
But the rise took much longer than many had expected. And when the pandemic came in 2020, the situation suddenly became even worse. With a debt of approximately NOK 20 billion, Borr had to raise money by selling new shares in several rounds to get breathing room from creditors. The issue that gave Sveaas a share of the company that was almost as large as Trøim’s was not the last either.
But now everything looks brighter for Borr. The energy crisis that simmered in the autumn of 2021 and was intensified by the war in Ukraine last year has directed investors’ attention to energy security and underinvestment in oil and gas. Borr is far from the only company in the sector that has benefited from it. Sveaas also bet on the offshore shipping company Siem Offshore last year, and there he has more than doubled the money, with a position that is now worth almost NOK 1.3 billion.
Last year, the company carried out yet another share issue, but as part of an even more extensive restructuring of the debt, with due dates now several years in the future and fewer creditors. Only details remain with the bond loan for it to be complete.
Trøim himself has in some public appearances, such as Pareto’s energy conference in September, described the years after the drop in oil prices as very tough. The investor, who was previously billionaire John Fredriksen’s right-hand man, has now rebuilt himself and, according to Holdings, has a stock market value of approximately NOK 2.7 billion. (Terms)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using links, which lead directly to our pages. Copying or other forms of use of all or part of the content may only take place with written permission or as permitted by law. For additional terms se her.
