Upstream, Downstream, One Voice

Borr places $350 million convertible bonds and acquies 5 jack-ups from Keppel

Borr Drilling Limited has placed $350 million of convertible bonds with a coupon of 3.875% per annum and a conversion premium of 37.5% above a reference price of $4.87/share.

The proceeds of the convertible bond offering will be, together with a $200 million bank financing and a $432 million seller financing, used to acquire five high spec newbuild jack-ups from Keppel FELS, and to strengthen the working capital of the Company.

The acquisition will increase the Borr Drilling fleet to a total of 29 premium jack-up rigs once all rigs under construction have been delivered, out of which 27 jack-ups were built after 2011. Total consideration for the transaction will be approximately $745 million including financing fees. Both the delivery financing of the rigs and the bank financing has been secured at attractive terms.

Borr Drilling will take delivery of the first rig in Q4 2019 with the remaining rigs being delivered quarterly thereafter until the last rig is delivered in Q4 2020. Borr Drilling has agreed to pay a pre-delivery instalment of $288 million in the short term. The remaining purchase price is payable on delivery of each individual rig, which is fully financed by the delivery financing.

The Company continues to deliver on its strategy to acquire premium jack-up drilling rigs at attractive prices and consolidate ownership in the premium segment of the overall jack-up rig fleet. After this acquisition, Borr Drilling sees limited further opportunities for further acquisition of high-quality rigs at attractive prices.

In addition to assisting the acquisition of the five rigs from Keppel FELS, the convertible bond issuance will significantly strengthen the Company’s liquidity position.

CEO Svend Anton Maier commented: “Borr has recently secured work with a new client in West-Africa for one of its assets for 180 days at $80,000 day. The marketing strategy focusing on cash generative contracts will continue. The shareholders should as a result of such a firm contracting strategy expect relatively low utilisation in 2018, but with anticipated solid recovery in 2019. Recent award of long-term contracts in the Middle-East has significantly reduced the availability of modern tonnage in the market. There are clear signs that rates are improving as a result of increased activity and improved oil prices.”

With 29 modern rigs and a market cap of $2.6 billion, Borr Drilling has gained significant investor interest. In order to increase liquidity in the trading of the shares, at a meeting in Amsterdam on 15th May 2018, the Board of Borr Drilling decided to start the process for listing Borr shares on an additional recognised international exchange.