Norwegian offshore driller Borr Drilling has obtained significant amendments to facilities from its secured lenders and shipyards that will provide total liquidity improvement of more than $315m until the first quarter of 2022.
Under the amendment agreement, the company will defer the delivery of five newbuild jack-ups rigs until mid-2022, and defer certain interest payment and debt amortisation until 2022.
Additionally, the company will amend certain financial covenants including reduction of the minimum liquidity covenant from 3% of net interest bearing debt, to $5m with a gradual step-up to $20m, change of the minimum book equity ratio from 33.3% to 25%, and suspension of the debt service coverage ratio covenant of 1.25x by December 31, 2021.
“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,” said Chairman Paal Kibsgaard.
Borr Drilling was hit by financial difficulties with contract cancellations amid the recession in the offshore market. In February, the company announced a plan to sell some of its rigs to raise cash.