UPDATE 1-Hercules' Seahawk assets buy under cloud on bribery probe

Fri Apr 8, 2011 9:08pm IST

Stocks

   

* Deal to buy Seahawk rigs under scanner

* SEC declines to comment

* Shares down 8 pct (Adds SEC reaction, background)

By Krishna N Das

BANGALORE, April 8 (Reuters) - An investigation to ascertain if Hercules Offshore Inc bribed officials overseas could cast a shadow on the shallow-water oil driller's plan to buy assets of Seahawk Drilling Inc .

Houston-based Hercules said on Thursday it was being probed by the U.S. Securities and Exchange Commission (SEC) for potential violations of the Foreign Corrupt Practices Act. The Department of Justice (DOJ) was also reviewing certain of the company's activities. [ID:nL3E7F73Q3]

"While obviously a negative, there are too few details to ascertain the degree of damage," Raymond James analysts said in a note.

"Does the investigation endanger the Seahawk acquisition?" the analysts asked.

As part of its bankruptcy protection proceedings, Seahawk intends to sell 20 rigs to Hercules for about $100 million. [ID:nL3E7DB22W]

Hercules -- whose international markets include West Africa, Latin America, India, the Middle East and Malaysia -- did not immediately reply to a voice mail seeking comment.

An SEC spokeswoman declined to comment. A DOJ spokesperson was not immediately available to comment.

The investigation will at least be a distraction, involving both personnel and financial resources, and though the extent is yet to be determined, the process could be drawn out, said Matt Beeby, analyst with Global Hunter Securities.

Late last year, Hercules' bigger rival Pride International Inc paid $56.2 million to settle a case related to bribing officials in Venezuela and Mexico. [ID:nSGE6B60CL]

Shares of Hercules were down 7 percent at $5.97 in morning trade on Friday on Nasdaq. They had earlier touched $5.50. (Reporting by Krishna N Das in Bangalore; Editing by Sriraj Kalluvila, Maju Samuel)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Trade Deal

REUTERS SHOWCASE

Record High

Record High

Nifty hits record high on foreign buying, higher Asian stocks.  Full Article 

Bullish on Equities

Bullish on Equities

Bullish on Indian equities, but gains seen 'less sharp'- Goldman Sachs  Full Article 

Facebook Results

Facebook Results

Second quarter revenue increases 61 percent  Full Article 

BRICS Bank

BRICS Bank

World Bank chief welcomes new BRICS development bank.  Full Article 

Streamlining Operations

Jet Streamlines

Jet Airways chairman says looking to restructure debts, talking to bankers  Full Article 

Political Economy

Political Economy

Analysis - Watch what markets don't do as world politics turns nasty   Full Article 

Photo

Honda's India Thrust

Honda's India unit to account for 25 pct of Asia Pacific sales by March 2017 - exec   Full Article 

 Boosting Output

Boosting Output

NMDC plans to boost iron ore output by two-thirds  Full Article 

Apple Results

Apple Results

Apple margin concerns fade, focus shifts to iPhone launch  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage