Noble Receives Private Letter Ruling For Spin-Off Transaction - Quick Facts

(RTTNews) - Offshore drilling contractor Noble Corp. (NE) announced Friday that it has received private letter ruling from the Internal Revenue Service relating to the tax treatment of the recently announced proposed spin-off of the Company's standard specification drilling business. The private letter ruling addresses key aspects of the tax treatment of the proposed transaction.

The previously announced spin-off transaction, if effected, is expected to qualify as a tax-free transaction.

The company said it continues to proceed with its preparation for the spin-off.

In late-September 2013, Noble said that its board approved a plan to separate the company's business into two separate and highly-focused offshore drilling companies.

Noble added that the separation of the business may be preceded by an initial public offering of up to 20 percent of the shares of the new company, which will own Noble's older rigs.

The company expected to execute the separation through a distribution of the shares of the new company to its shareholders in a spin-off that would be tax-free to shareholders.

The transaction is subject to the approval of Noble's shareholders, which the company anticipates seeking in the second quarter of 2014. Noble expects to complete the spin off by the end of 2014.

The new company would own and operate the drilling units comprising most of the standard-specification drilling units in the Noble fleet. This includes five drillships, three semisubmersibles, 34 jackups, two submersibles, and one FPSO. The new company would also be responsible for the Hibernia platform operations.

Noble said it would continue to own and operate its 35 high-specification rigs with particular operating focus in deepwater and ultra-deepwater markets for drillships and semisubmersibles as well as harsh environment and high-specification markets for jackups. Its fleet would consist of 15 jackups and 20 floaters.