OSLO, Norway, Dec. 27, 2021 /PRNewswire/ -- Borr Drilling
Limited (the "Company") (NYSE and OSE: BORR) is pleased to announce
that it has reached agreements in principle with its largest
creditors, the Singaporean yards, to refinance and defer a combined
$1.4 billion debt maturities and
delivery instalments from 2023 to 2025. This is a major step
forward in the Company's previously announced target to address its
debt maturities and commitments currently due in 2023.
In return for these concessions, the Company has agreed to make
cash repayments on the accrued costs and capitalised PIK interest
owed to the yards during 2022 and 2023, in addition to what was
agreed in the January 2021
amendments. These additional payments amount to $22.4 million at the completion of the amendment
agreements for the deferral (including $6.5
million of amendment fee), expected to be in January 2022 and an additional $28.6 million payable later in 2022. It is also
agreed that the payment of the remaining deferred yard costs and
capitalised interest originally due in 2023 will be paid out during
2023 and 2024. In addition, regular payments of cash interest and
capital costs for deferring deliveries will commence in 2023. The
agreement in principle also contemplates applying a portion of
future net equity offerings (approximately 35%) to repay amounts
owed to the yards, first to be applied to the accrued and
capitalised costs, and secondly to repay principal.
Both agreements are subject to the yards' board approvals,
expected in mid-January 2022, and the
consent from the Company's other creditors.
The Company expects to seek raising approximately $30 million in new equity to cover the
incremental $22.4 million cash
payments due to the shipyards at the completion of the
agreements.
Based on the contracted backlog, expected roll-over of current
contracts and additional contract awards through 2022, Borr
Drilling expects to have at least 18 rigs operating mid 2022,
generating a significantly higher level of Adjusted EBITDA compared
to the $20 million reported in the
third quarter 2021 with 13 rigs operating. The new debt structure
with no scheduled debt amortisation to the yards and reasonable
interest cost level until 2025 secures a low cash break even for
the Company.
"Borr Drilling is very appreciative of the support received from
its main creditors. It is a testament to the trust placed in Borr
Drilling, and confidence in the recovery of the market we now see
unfolding. With a very large portion of the debt now being
deferred, strong operational performance on our 18 rigs contracted
and the expected further improvements in Adjusted EBITDA, we are
positioned to fully benefit from a recovery in the jack-up drilling
market. We believe that the current transaction benefits all
stake-holders, creating a long-term solution with upside for both
debt and equity holders" says CEO Patrick
Schorn
This agreement in principle with the yard, if approved,
contemplates that Borr Drilling will refinance maturities of its
Senior Secured Credit Facilities and Hayfin facilities and
convertible bonds to mature in 2025 or later and if such
refinancing is not complete by June
2022, the refinancing of maturities and delivery deferrals
will revert to the current schedule. Borr Drilling will
continue to engage with these lenders to find a solution to defer
or refinance the remaining debt maturities currently due in 2023,
giving the Company a complete long-term financing solution.
Hamilton, Bermuda
27 December 2021
Forward looking statements
This announcement includes forward looking statements, which may
be identified by words such as "anticipate", "believe", "continue",
"estimate", "expect", "intends", "may", "should", "will", "likely"
and similar expressions and include statements with respect to the
agreement in principle with the yards, including the expected terms
and conditions of such agreement in principle, expected payments to
the yards under such agreement in principle, the expected approval
of such agreement by the boards of directors of the yards, the plan
to seek an equity raise and the intended amount of such raise and
expected conditions of such a raise, expected Adjusted EBITDA in
2022, our expectation that we will be able to benefit from an
expected recovery in the market, the expectation that this
agreement in principle with the yards will create the basis for a
long term solution with upside for debt and equity and other
expected benefits of the agreement in principle with lenders and
our plan to seek an agreement with other creditors and other
non-historical statements. The forward-looking statements in
this announcement are subject to risks, uncertainties,
contingencies and other factors could cause actual events to differ
materially from the expectations expressed or implied by the
forward-looking statements included herein, including risks
relating to the agreement in principle with the yards,
including the risk that board approvals for the agreements above
are not obtained, the risk that we are unable to obtain necessary
consents from other creditors, raise the required equity or reach
final agreement and execute definitive documentation with the yards
for this agreement in principle and risks relating to the final
terms of such agreements, risks relating to meeting conditions to
these agreements, including the payment requirements of these
agreements, the risk that we may not be able to refinance our
Senior Secured Credit and Hayfin facilities and convertible
notes required a condition to this agreement with the yards,
risks relating to the contemplated equity raise risks relating to
our liquidity including the risk that we may have insufficient
liquidity to fund our operations, risks relating to business
and industry including industry conditions, the risks that actual
results will be lower than those anticipated, risks relating to
cash flows from operations, the risk that we may be unable to raise
necessary funds through issuance of additional debt or equity or
sale of assets and the risk that future equity raises will dilute
existing shareholders, risks relating to our debt instruments
including risks relating to our ability to comply with covenants
and obtain any necessary waivers including risks relating to the
covenant waiver under the Senior Secured Credit facility which
extends to the end of March 2022
including risks associated with obtaining an extension of such
waiver and the risk of cross defaults, risks relating to our
ability to meet our debt obligations and obligations under rig
purchase contracts and other risks included in our filings with the
Securities and Exchange Commission including those set forth under
"Risk Factors" in our annual report on Form 20-F for the year ended
December 31, 2020 and prospectuses
filed with the Norwegian NSA.
This announcement does not constitute an offer to buy, sell or
subscribe for any securities described herein. The equity raise
referenced herein has not been and will not be registered under the
Securities Act of 1933 and may not be offered or sold in
the United States absent
registration or an applicable exemption from registration
requirements.
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SOURCE Borr Drilling Limited