Borr Drilling to Postpone Debt Payment, Plans Stock Issue to Weather Downturn

Terje Solsvik
Wednesday, September 23, 2020

Oil rig operator Borr Drilling Ltd has agreed with lenders to postpone the deadline for repayment of some of its debt, and aims to raise capital through equity as it seeks to overcome a demand slump, the company said late Tuesday.

Borr, which is dual-listed in Oslo and New York, reached a deal with banks as well as lender Hayfin Capital Management to push debt repayments of $595 million into 2023 from 2022 and to ease a minimum liquidity requirement, it said.

The plan rests on a commitment to raise between $40 million and $50 million in new equity at a subscription price of $0.7 per share, a 2.8% discount to its Wall Street closing on Tuesday.

Borr has secured investor commitments for some $30 million of the share issue, and may use some of the proceeds to buy back convertible debt, the company added.

"This will strengthen the balance sheet ahead of possible industry consolidation," Borr said in a statement.

It will also ask yards to accept extension of payment deadlines.

"We are confident that with this agreement and the continued support of the yards, we are creating a long-term solution, with low cash-breakeven for the coming years," newly appointed Chief Executive Patrick Schorn said.

Founded in the wake of the 2014-2016 oil price crash, Borr acquired a fleet of 30 modern rigs in a bet that the market for drilling and exploration would rebound in the following years.

But while its shares rose following a late-2016 stock market listing, they are down 92% so far this year as rig demand plunged amid the COVID-19 outbreak.

Competitor Seadrill on Sept. 16 agreed with creditors to suspend interest payments, following similar announcements of debt restructuring by other rig firms earlier this year. 

(Reporting by Terje Solsvik; Editing by Rashmi Aich)

Categories: People & Company News Finance Energy Drilling Activity Europe Rigs

Related Stories

Norway Greenlights Aker BP’s Exploration Drilling Campaign

Aker BP Gets Green Light for Exploration Drilling in North Sea

Sulmara to Work on Site Characterization at Scottish Floating Wind Farm

Current News

Beach Energy to Let Go 30% of Workforce Amid Strategic Review

Ocean Infinity Inks Deal with Shell for Subsea Data Capture Services

EnQuest Trims Loss and Announces $15M Share Buyback

Petrofac Gets Contract Extension with ONEgas in UK

Subscribe for OE Digital E‑News