Rowan plans to become UK company
Houston-based contract driller Rowan has revealed it is planning to change its home base to the UK to take advantage of better tax rates.
Rowan Companies, Inc. today announced that its Board of Directors has unanimously approved a plan to change the Company's corporate structure. The proposed plan is designed to enhance shareholder value by improving Rowan's long-term competitive position as a global contract driller.
Under the proposed plan, the Company's legal domicile would change from Delaware to the United Kingdom (U.K.), where the Company already has substantial and growing operations. The offshore drilling industry is a global business and Rowan has been evolving into a much more geographically diversified company. This change aligns the Company's structure with its significant shift in strategic focus toward key global markets over the past decade, as well as the central role of its U.K. base to Rowan's management and oversight of its global operations. The Company estimates approximately 81 percent of revenue will be derived from non-U.S. operations in 2012, compared with just ten percent in 2004.
By making the Company more competitive and enhancing its ability to reinvest in its business, Rowan expects that over the long term the proposed plan will lead to further growth and job creation in the U.S. and globally. This plan will have no effect on employees' jobs, wages, or current benefits.
Rowan's Board of Directors believes the plan reflects and reinforces many operating benefits from its growing base of activity in the U.K., including:
• Improving access to key customers in the U.K., Europe and Egypt, which collectively comprise 59 percent of Rowan's contract backlog;
• Enhancing the Company's ability to further expand in the North Sea and other markets by continuing to build an efficient shore base from which to reach its rigs and communicate with key customers in those important markets;
• Improving the general perception with customers and the investment community that Rowan is a global contract driller with an increasing focus on international markets, which generally offer longer-term contracts, a stronger backlog and more predictable cash flow; and
• Allowing Rowan, over the long term, to remain competitive with the effective tax rates of its global competitors, most of which are domiciled outside the U.S.