Borr Drilling Limited Announces Agreement to Defer $ 1.4 Billion in Debt Maturities and Site Payments Until 2025
Oslo, Norway, Dec. 27 2021 / PRNewswire / – Borr Drilling Limited (the “Company”) (NYSE and OSE: BORR) is pleased to announce that it has entered into tentative agreements with its major creditors, Singaporean Shipyards, to refinance and defer a $ 1.4 billion debt maturities and delivery tranches from 2023 to 2025. This is a big step forward in the company’s previously announced goal of meeting its debt maturities and current commitments due in 2023 .
In return for these concessions, the Company has undertaken to make cash reimbursements on accrued costs and capitalized PIK interest due to worksites in 2022 and 2023, in addition to what was agreed in the January 2021 amendments. These additional payments amount to $ 22.4 million at the end of the postponement amendments (including $ 6.5 million change fee), should be in January 2022 and an additional $ 28.6 million payable later in 2022. It is also agreed that payment of the remaining deferred construction costs and capitalized interest initially due in 2023 will be paid in 2023 and 2024. In addition, the regular payments of cash interest and capital costs for the postponement of deliveries will begin in 2023. The agreement in principle also envisages allocating a part of future offers net of equity (around 35%) to the reimbursement of sums due to worksites, on the one hand to be charged to expenses to pay and capitalized, and on the other hand to repay the principal.
The two agreements are subject to the approvals of the board of directors of the construction sites, expected in mid-January 2022, and the consent of the Company’s other creditors.
The Company expects to seek to raise approximately $ 30 million in new equity to cover the increase $ 22.4 million cash payments due to shipyards upon termination of agreements.
Based on the contracted backlog, the expected deferral of ongoing contracts and the award of additional contracts until 2022, Borr Drilling expects at least 18 drilling rigs to be operational by mid 2022, generating a significantly higher adjusted EBITDA level compared to $ 20 million reported in Q3 2021 with 13 platforms in operation. The new debt structure with no scheduled amortization of the debt to construction sites and a reasonable level of interest costs until 2025 guarantees a low breakeven point for the Company.
“Borr Drilling is very grateful for the support received from its major creditors. This is a testament to the confidence placed in Borr Drilling and the confidence in the market recovery that we are now seeing unfolding. With a very large portion of debt now deferred, strong operational performance on our 18 contract drills and further improvements expected in Adjusted EBITDA, we are positioned to take full advantage of a recovery in the jack-up drilling market. that the current transaction benefits all stakeholders, creating a long-term solution with benefits for debt and equity holders, ”says CEO Patrick schorn
This agreement in principle with the shipyard, if approved, provides that Borr Drilling will refinance the maturities of its senior secured credit facilities and its Hayfin facilities and convertible bonds due in 2025 or later and if such refinancing does not occur. is not finished by here June 2022, the refinancing of maturities and postponed deliveries will resume 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, providing the Company with a comprehensive long-term financing solution.
December 27, 2021
This announcement includes forward-looking statements, which may be identified by words such as “anticipate”, “believe”, “continue”, “estimate”, “expect”, “intention”, “could”, ” should ”,“ will ”,“ probable ”and similar expressions and include statements concerning the agreement in principle with the yards, including the terms and conditions expected of such an agreement in principle, the payments expected to the yards under of such an agreement in principle, the expected approval of such an agreement by the worksite boards of directors, the search plan for a capital increase and the expected amount of this increase and the expected conditions of a such increase, the adjusted EBITDA expected in 2022, our expectation of being able to benefit from an expected recovery in the market, the expectation that this agreement in principle with the shipyards lays the foundations for a long-term solution with advantages for debt and cap own costs and other benefits expected from the agreement in principle with lenders and our plan to seek agreement with other creditors and other non-historical statements. The forward-looking statements contained in this announcement are subject to risks, uncertainties, contingencies and other factors that could cause actual events to differ materially from the expectations expressed or implied by the forward-looking statements included herein, including the risks associated with the agreement in principle with the shipyards, including the risk that the board approvals for the above agreements will not be obtained, the risk that we may not be able to obtain the consents necessary from other creditors, to raise the required equity capital or to reach a final agreement and to execute the final documentation with the yards for this agreement in principle and the risks associated with the final conditions of these agreements, the risks associated with compliance of the terms of those agreements, including the payment requirements of those agreements, the risk that we may not be able to refinance er our senior secured and Hayfin credit facilities and convertible bonds required condition to this agreement with the yards, the risks related to the common stock content increase the risks to our liquidity, including the risk that we may have insufficient liquidity to finance our operations, business and industry risks including industry conditions, risks that actual results will be less than anticipated, risks related to cash flows from operations, the risk that we may not be able to raise the necessary funds by issuing debt or equity with the covenants and obtain all necessary waivers, including the risks associated with the waiver of the covenants under the secured credit facility first row that extends to the end of March 2022 including the risks associated with obtaining an extension of this waiver and the risk of cross-defaults, risks relating to our ability to honor our debts and obligations under platform purchase contracts and other risks included in our files with the Securities and Exchange Commission, including those set out 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 the securities described here. The capital increase referenced here has not been and will not be registered under the Securities Act of 1933 and cannot be offered or sold in United States lack of registration or an applicable exemption from registration requirements.
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SOURCE Borr Drilling Limited