Oil rig owner Borr to delay debt repayment, plans stock issue to weather downturn

Borr Drilling

23/09/2020 07:11

OSLO, Sept 23 (Reuters) - Oil rig operator Borr Drilling Ltd
 BDRILL.OL   BORR.N  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  SDRL.OL  on Sept. 16 agreed with
creditors to suspend interest payments, following similar
announcements of debt restructuring by other rig firms earlier
this year.  urn:newsml:reuters.com:*:nL8N2GD0P6

 (Reporting by Terje Solsvik; Editing by Rashmi Aich)
 ((terje.solsvik@thomsonreuters.com; +47 918 666 70))