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(Bloomberg) — Prosafe SE fell the most in almost seven months in Oslo as a share sale equivalent to 5.7 percent of the company outweighed the effect of plans to fund growth to meet demand for floating vessels to house offshore oil workers.
The Larnaca, Cyprus-based company dropped as much as 4.3 percent, the most since Aug. 23, to 58.2 kroner. Prosafe sold 13 million new shares at 58 kroner each, raising 754 million kroner ($130 million), it said today in a statement. The stock closed at 60.8 kroner yesterday, the highest level in more than five years, after winning a $137.5 million deal from Talisman Sinopec Energy U.K. Ltd. for one of its accommodation units.
Proceeds of the sale will be used to fund “value enhancing growth investments,” it said. “The prospects and fundamentals of the accommodation market remain attractive.”
The company, which owns 11 semi-submersible accommodation rigs and has two on order, is betting on rising demand as energy companies expand exploration for hydrocarbons offshore.
Prosafe fell 4.1 percent to 58.3 kroner by 11:38 a.m. in Oslo. More than 858,000 shares have traded so far today, almost double the three-month average daily volume for the stock.
“The company will be cautious to order another new-build without a contract so we expect either a back-to back contract or acquisition of an existing rig,” Pareto Securities ASA said in a note. Even though Prosafe’s share price is close to the broker’s 62 kroner price target, “we stick to our buy rating in expectation of a value enhancing transaction,” it said.
– Alastair Reed, Copyright 2013 Bloomberg.
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