OSLO, Norway, June 5, 2020 /PRNewswire/ -- Reference is made to
Borr Drilling Limited's ("Borr Drilling" or the "Company") (NYSE:
BORR) (OSE: BDRILL) stock exchange notices dated May 20 and May 21,
2020.
The Company is pleased to announce it has obtained significant
amendments to facilities from its secured lenders and shipyards
that will provide total liquidity improvement of more than
$315 million in the period to the
first quarter of 2022. These amendments have now been agreed with
the following key terms:
- Deferral of the delivery of five newbuild jack-ups rigs until
mid-2022, representing estimated liquidity improvement of
approximately $190 million until the
first quarter of 2022.
- Deferral of certain interest payments until 2022, representing
an estimated liquidity improvement of approximately $60 million.
- Deferral of debt amortisation in 2021 of $65 million until maturity of the loans in the
second quarter of
2022.
- Amendment of certain of the financial covenants,
including
-
- Reduction of the minimum liquidity covenant from 3% of net
interest bearing debt, to $5 million
with a gradual step-up to $20 million
at December 31, 2021, which gives a
liquidity improvement of up to $40
million in the period. Thereafter the 3% level will be
reinstated. As part of the amendments, utilization of the remaining
$30 million under our revolving
credit facilities require all banks'
consent.
- Amending the minimum book equity ratio from 33.3% to 25% up to
and including 31 December 2021.
Thereafter the required ratio will be 40%.
- Suspension of the Debt Service Coverage Ratio covenant of 1.25x
until 31 December
2021.
- Waivers of certain covenants in our ring-fenced financing
structure including incremental liquidity from restricted
cash.
The amendments provide for payment of certain interest payments
originally due at the end of the first quarter of 2020 which had
been deferred with lender consent, as well as other amendments to
the facilities.
"We are extremely pleased with the support given to the Company
by all stakeholders. The amended financing package gives a required
cash break-even bareboat contribution in 2021 at only around
$20,000/day per rig based on just 12
rigs in operation. In addition, the Company has six more rigs
activated and available, which it only intends to bring back to
work on cashflow accretive contracts. We are also encouraged by the
already improving supply-demand outlook for oil, and optimistic
that this will lead to a gradual improvement in jack-up drilling
activity in the coming year. We furthermore continue to look at
additional initiatives to improve liquidity", says Chairman
Paal Kibsgaard.
The agreements are conditional on the issuance of 46,153,846 new
shares to the subscribers of the $30
million equity offering, which is expected to be settled
June 5, 2020.
A Special General Meeting of the shareholders of the Company was
held on June 4, 2020 at 9:30 a.m. at the Company's Registered Office, 2nd
Floor, 9 Par-la-Ville Road, Hamilton HM11, Bermuda, passing the following resolution:
"That the Company's authorised share capital be increased from
US$6,875,000 divided into 137,500,000
common shares of US$0.05 par value
each to US$9,182,692.30 divided into
183,653,846 common shares of US$0.05
par value each by the authorisation of an additional 46,153,846
common shares of US$0.05 par value
each."
This announcement does not constitute an offer to buy, sell or
subscribe for any securities described herein. The securities
offered will not be or have not been 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.
FORWARD LOOKING STATEMENTS
This announcement includes forward looking statements. Forward
looking statements are, typically, statements that do not reflect
historical facts and may be identified by words such as
"anticipate", "believe", "continue", "estimate", "expect",
"intends", "may", "should", "will" and similar expressions and
include statements with respect to the amendments agreed with
creditors, including expected liquidity improvements from those
amendments; the Company's plans to continue to look for initiatives
to improve liquidity; expected cash bareboat break even rates;
intentions with respect to bringing rigs back to work; statements
with respect to expected supply-demand outlook for oil, and
expected trends in jack-up drilling activity in the coming yea; and
other non-historical statements. The forward-looking statements in
this announcement are based upon various assumptions, many of which
are based, in turn, upon further assumptions, which are, by their
nature, uncertain and subject to significant known and unknown
risks, contingencies and other factors which are difficult or
impossible to predict and which are beyond our control. Such 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.
Important factors that could cause actual results to differ
materially from those discussed in the forward looking statements
include risks relating to the amendments we have agreed with
lenders and shipyards, including the risks relating to meeting
conditions precedent and subsequent to these agreements; risks
relating to our liquidity including the risk that we may have
insufficient liquidity to fund our operations; risks that the
expected liquidity improvements do not materialize, the risk that
our customers do not comply with their contractual obligations,
including payment or approval of invoices for factoring; , risks
relating to industry conditions and tendering activity, 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 may have to delay or cancel
discretionary capital expenditures; risks relating to our debt
instruments including risks relating to our ability to comply with
covenants and obtain any necessary waivers and the risk of cross
defaults, as well as those risks described in the section entitled
"Risk Factors" in our filings with the Securities and Exchange
Commission.
Questions should be directed to:
Magnus Vaaler
VP Investor Relations and Treasury
+44-7708899316
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SOURCE Borr Drilling Limited