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

REUTERS SHOWCASE

Press Event

Press Event

Modi takes tea, but no questions, in first press event as PM.  Full Article 

School Shooting

School Shooting

Two killed, four wounded in Washington state school shooting.  Full Article 

Sundar Pichai Elevated

Sundar Pichai Elevated

Google's Pichai to oversee major products and services.  Full Article 

Need For Reforms

Need For Reforms

Euro zone risks "relapse into recession" without structural reforms - Draghi.  Full Article 

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Health Of Lenders

Health Of Lenders

25 European banks set to fail health checks - sources.  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

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