An independent consulting firm has recommended Nabors Industries Inc. shareholders vote in favour of reincorporating in Bermuda.

PRNewswire reported yesterday that Nabors Industries, Inc. announced this week that Institutional Shareholders Services Inc. (ISS), the country's leading independent proxy advisor, has formally recommended that Nabors' shareholders vote in favour of the company's reincorporation to Bermuda.

Shareholders will vote on the move on June 14.

Gene Isenberg, chairman and chief executive officer of Nabors, said, "We are very pleased to have received this independent endorsement to reincorporate the company in Bermuda. We remain committed to this important step for the company and its stakeholders and look forward to implementing the reorganisation."

The Nabors companies own and operate more than 500 land drilling and 740 land workover and well-servicing rigs worldwide. Offshore, Nabors operates 44 platform, 15 jack-ups, and three barge rigs in the domestic and international markets.

Nabors also operates 30 marine transportation and support vessels in the Gulf of Mexico. In addition, Nabors manufactures top drives and drilling instrumentation systems and provides comprehensive oilfield hauling, engineering, civil construction, logistics and facilities maintenance, and project management services. Nabors participates in most of the significant oil, gas and geothermal markets in the world.

On January 4, The Royal Gazette reported that Nabors Industries announced plans to move its incorporation to the Island in a move expected to be completed during the quarter.

The Nabors board of directors unanimously approved the plan to reorganise and change the company's incorporation from Delaware to Bermuda. Nabors Industries Ltd., a newly formed Bermuda entity, will become the parent holding company of Nabors Industries - subject to the approval of shareholders.

However, the proposed move to Bermuda has not been plain sailing.

Last week it was reported that a Nabors shareholder, Steven Rosenberg, had filed a lawsuit in an effort to block the company's proposed reincorporation in Bermuda.

The lawsuit, filed on May 23 in the US District Court of the Southern District of Texas, seeks to obtain a preliminary and permanent injunction against the stockholder vote regarding the reorganisation and to obtain monetary damages.

The lawsuit contains four counts against the company and its board. In one count the plaintiff alleges that Nabors' proxy statement contained misleading statements and omissions, including allegations about the risks that the reorganisation would not result in favourable tax treatment because Nabors Bermuda and Nabors Delaware will be operated from the US.

Despite the lawsuit, Reuters reported on Tuesday that Nabors said the long-term benefits from the move to Bermuda would outweigh one-time capital gains taxes that investors would have to pay when the move takes effect.

Mr. Isenberg explained that the move will be treated as a sale and will therefore be subject to capital gains taxes for stockholders.

Mr. Isenberg also said that the company firmly believes that the tax savings and other long-term benefits would more than compensate for the capital gains taxes investors would have to pay.

While US lawmakers accuse companies such as Nabors of putting profits before patriotism and have introduced legislation to discourage the practice, Mr. Isenberg is reported to have said: "We follow the law all the time. If they want to change the law, God bless them."