renegotiated its senior bank debt.

The company, which provides mobile oil rig drilling services, also announced that its largest shareholder has changed.

Arethusa, which was founded in 1990 and is chaired by Bermuda resident Mr.

Michael Naess, said Christiana Bank of Oslo leads two other banks in a new, five year, $80-million loan facility, which will be used to retire existing secured debt of $71.8 million, with the balance of the money being added to working capital.

The Bermuda company is able to reduce, under the new agreement, its annual principal repayments from $23 million to $11.4 million, with a final balloon payment of $25.7 million due on the fifth anniversary date.

The interest rate for the new loan is the same as the old, Libor plus 1.875 percent. Previous restrictive covenants relating to proceeds from rig sales have been significantly relaxed.

The company's two largest shareholders have been released from debt guarantees aggregating $9 million.

Arethusa's largest single shareholder since its formation in 1990, Ymer Offshore AB of Stockholm, is being reorganised and decapitalised.

Under that company's reorganisation plan, its 6.5 million shares in Arethusa, equivalent to 32.2 percent of the company, will be distributed to its fifteen different shareholders, including four individuals and eleven Swedish institutions.

Following the reorganisation, the largest of these new shareholders will be Forvaltnings AB Ratos, a well-known Swedish investment company listed on the Stockholm Exchange. Ratos will become the second largest shareholder with 4.1 million shares equivalent to 20.5 percent of the 20.3 million Arethusa common shares presently outstanding.

The company said yesterday that Alphee SA, a Luxembourg subsidiary of CMB NV of Antwerp, Belgium, will now be its largest shareholder.

Alphee was another of the company's co-founders and its shareholding of Arethusa remains unchanged at 5.3 million shares or 26.2 percent of the total outstanding issue.

CMB, which is listed on the Brussels Exchange, is Belgium's largest shipping company with widely-diversified interests in the bulk and liner trades and various related industrial activities.

The company's major shareholders entered into a new agreement recently in anticipation of the Ymer reorganisation, replacing a predecessor agreement entered into between Alphee and Ymer in February of last year.

The signatories of the new shareholders agreement include Alphee, Ymer and two parent companies, CMB and Ratos. The two groups have undertaken to consult and cooperate with one another as Arethusa shareholders with respect to board representation and policy issues.

In the event either of the two groups elects to sell shares, reducing its holding below 16.67 percent of Arethusa's voting shares, then the other group is granted first right of refusal on such shares.

As a consequence of the Ymer reorganisation, Arethusa announced that it was filing a shelf registration statement with the SEC, covering the 11.9 million shares of common stock owned by former shareholders of Ymer and Alphee. These shares may be available for sale from time to time in the open market.

No underwriter has been engaged to market the shares. The company has not been made aware of any specific disposition plans on the part of the selling shareholders, and Ratos has announced in Sweden that it has no intention to part with Arethusa shares at present.

Mr. Naess said: "All these developments are long-term positive. The new bank loan will reduce principal payments by $11.6 million per year and will provide us with much-enhanced flexibility in our planning.

"It also seems entirely appropriate given that our outstanding long-term debt balance, after the deal is closed, will approximate 26 percent of book equity.

"We are pleased, furthermore, that the release of our major shareholders from their debt guarantees means the company is now financially self-sufficient.

"The Ymer reorganisation broadens and diversifies our shareholder base and brings us a group of strong new direct shareholders, and we will look forward to working with them. Most of them, we have been led to believe, will be long-term investors, and the new shareholders agreement between the Swedish and Belgian groups is very helpful, since it means that of the 11.9 million shares now being registered, 6.8 million are subject to the mutual first-refusal rights granted to each other by the major shareholding groups and are therefore unlikely to come on to the market during the foreseeable future.

"As to the balance of 5.1 million shares, to the extent that these shares are sold gradually and in an orderly fashion, as expected, they will serve to increase our float and thus enhance liquidity in our shares.'' Arethusa owns and/or operates a fleet of 15 mobile offshore drilling rigs, including ten semi-submersibles and five jack-ups. The fleet of semi-submersibles is the largest in the world and Arethusa is the second largest semi-submersible operator in the Gulf of Mexico. The balance of the fleet is deployed offshore of Brazil, Holland, India and Indonesia.

This July, Arethusa announced third quarter profits of $546,000 or $0.03 per share, compared to a net loss of $1,283,000 or $0.08 per share in the third quarter a year ago.