North Atlantic Drilling Ltd. Common Shares North Atlantic Drilling Ltd
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PROSPECTUS 13,513,514 Common Shares North Atlantic Drilling Ltd. Common Shares North Atlantic Drilling Ltd. is offering 13,513,514 of its common shares. This is our initial public offering in the United States and currently our common shares are not listed on any United States securities exchange. The initial public offering price is $9.25 per share. References in this prospectus to common shares are adjusted to reflect the consolidation of our common shares through a one-for-five reverse stock split, which our board of directors made effective as of November 19, 2012. Our common shares are traded on the Norwegian OTC List, an over-the-counter market that is administered and operated by a subsidiary of the Norwegian Securities Dealers Association, under the symbol “NADL.” On December 30, 2013, the closing price of our common shares was 57.50 Norwegian Kroner (“NOK”) per share, which was equivalent to approximately $9.47 per share based on the Bloomberg Composite Rate of NOK6.07 per $1.00 in effect on that date. We completed private offerings in accordance with Regulation S under the Securities Act of 1933, as amended (the “Securities Act”), in February 2011 for 50,000,000 common shares (the “2011 Private Placement”) and in March 2012 for 30,000,000 common shares (the “March 2012 Private Placement”), of which 15,000,000 common shares were acquired by Seadrill Limited (NYSE:SDRL), or Seadrill. Concurrently with this offering, we will offer to exchange the unregistered common shares previously issued in the 2011 Private Placement and the March 2012 Private Placement, other than the common shares owned by Seadrill or other affiliates of ours, for common shares that have been registered under the Securities Act. The sales of substantial amounts of these common shares in the near term, or the perception that these sales may occur, could cause the market price of our common shares to decline. Our common shares have been approved for listing on the New York Stock Exchange under the symbol “NADL,” upon notice of issuance. We were an “emerging growth company”, as defined under the Jumpstart Our Business Startups Act, or JOBS Act, at the time we publicly filed our initial registration statement with the Securities and Exchange Commission. We are eligible for reduced disclosure requirements applicable to emerging growth companies through the effectiveness of this registration statement. See “Summary—Reduced Disclosure Requirements.” Investing in our common shares involves risks. See “Risk Factors” beginning on page 20. PRICE $9.25 PER SHARE Underwriting Discounts Proceeds to Price to and North Atlantic Public Commissions(1) Drilling Per Share ............................................. $ 9.25 $ 0.555 $ 8.695 Total ................................................. $125,000,005 $7,500,000 $117,500,005 (1) We refer you to “Underwriters” beginning on page 139 of this prospectus for additional information regarding underwriter compensation. We granted the underwriters the option to purchase up to an additional 2,027,027 of our common shares to cover over-allotments, if any. At our request, the underwriters have agreed to sell Seadrill up to 10% of the common shares to be offered and sold in the offering, excluding common shares that may be sold pursuant to the underwriters’ option to purchase additional common shares. The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The underwriters expect to deliver the common shares to purchasers on February 3, 2014. MORGAN STANLEY BARCLAYS GOLDMAN, RS PLATOU SACHS & CO. MARKETS AS Co-Managers DNB MARKETS SCOTIABANK / HOWARD WEIL January 28, 2014 Our semi-submersible rig, the West Phoenix. TABLE OF CONTENTS PROSPECTUS SUMMARY .............................................................. 1 SUMMARY FINANCIAL AND OPERATING DATA ......................................... 16 FORWARD-LOOKING STATEMENTS .................................................... 18 RISK FACTORS ........................................................................ 20 USE OF PROCEEDS .................................................................... 43 CAPITALIZATION ..................................................................... 44 PER SHARE MARKET PRICE INFORMATION ............................................. 45 DIVIDEND POLICY .................................................................... 47 DILUTION ............................................................................ 48 SELECTED CONSOLIDATED AND COMBINED FINANCIAL AND OTHER DATA ............... 49 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS .................................................................... 50 INDUSTRY AND MARKET CONDITIONS ................................................. 71 BUSINESS ............................................................................ 88 MANAGEMENT ....................................................................... 112 CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS ........................ 117 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ........... 124 DESCRIPTION OF CAPITAL STOCK ...................................................... 125 CERTAIN BERMUDA COMPANY CONSIDERATIONS ...................................... 128 SHARES ELIGIBLE FOR FUTURE SALE .................................................. 131 TAX CONSIDERATIONS ................................................................ 132 UNDERWRITERS ...................................................................... 139 ENFORCEMENT OF CIVIL LIABILITIES .................................................. 143 LEGAL MATTERS ..................................................................... 144 EXPERTS ............................................................................. 144 WHERE YOU CAN FIND ADDITIONAL INFORMATION ..................................... 144 OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION .................................... 145 INDEX TO FINANCIAL STATEMENTS OF NORTH ATLANTIC DRILLING LTD. ................ F-1 You should rely only on the information contained in this prospectus or in any free writing prospectus we may authorize to be delivered to you. We have not, and the underwriters have not, authorized any other person to provide you with additional, different or inconsistent information. If anyone provides you with additional, different or inconsistent information, you should not rely on it. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission (the “SEC”) is effective. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information appearing in this prospectus is accurate as of any date other than the date on the front cover of this prospectus unless otherwise specified herein. Our business, financial condition, results of operations and prospects may have changed since that date. Information contained on our website does not constitute part of this prospectus. We have not taken any action to permit a public offering of these securities outside the United States or to permit the possession or distribution of this prospectus outside the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions relating to the offering of these securities and the distribution of this prospectus outside the United States. Until February 22, 2014 (the 25th day after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. i Common shares may be offered or sold in Bermuda only in compliance with the provisions of the Investment Business Act of 2003 and the Exchange Control Act 1972, and related regulations of Bermuda which regulate the sale of securities in Bermuda. In addition, specific permission is required from the Bermuda Monetary Authority, or the BMA, pursuant to the provisions of the Exchange Control Act 1972 and related regulations, for all issuances and transfers of securities of Bermuda companies, other than in cases where the BMA has granted a general permission. The BMA in its policy dated June 1, 2005 provides that where any equity securities, including our common shares, of a Bermuda company are listed on an appointed stock exchange, general permission is given for the issue and subsequent transfer of any securities of a company from and/or to a non-resident, for as long as any equities securities of such company remain so listed. The NYSE is deemed to be an appointed stock exchange under Bermuda law. In granting such permission, the BMA accepts no responsibility for our financial soundness or the correctness of any of the statements made or expressed in this prospectus. This prospectus does not need to be filed with the Registrar of Companies in Bermuda in accordance with Part III of the Companies Act 1981 of Bermuda pursuant to provisions incorporated therein following the enactment of the Companies Amendment Act 2013. Such provisions