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Borr Drilling, the drilling platform company of Tor Olav Trøim, has long struggled with heavy debts in a difficult market, but the wind has long since changed. Now the company is refinancing its entire debt by raising billions in the form of new bonds and a new loan – and completing an issue of NOK 560 million, underscoring how much easier things have become for the company.
Borr reported on Tuesday morning, just after the stock market opened, that it sold new shares for NOK 74 each, which is a negligibly small discount compared to the closing price of NOK 74.6 on Monday afternoon. In other words: less than one percent. This indicates that there is strong investor interest in buying shares, and that the company does not have to go particularly far.
The share also rose on Tuesday after the news, reaching a maximum of NOK 75.9.
Major refinancing
The issuance is a minor part of a major refinancing that the company announced on Monday evening. Last year, Borr reached major agreements with creditors after several years of interim solutions, which involved deferring the bulk of its debt of just under NOK 20 billion until 2025. But the company has made clear its aim to refinancing to create even more peace in the capital structure, and on Monday the announcement about the new package came with these main points:
Article continues below ad In total, there is 1.5 billion dollars, or 16.6 billion kroner, of new bonds due in 2028 and 2030. The bonds are backed by the company’s assets. A $180 million credit facility that takes priority over other debt. The mentioned problem.In total, we are talking about a package that corresponds to more than 19 billion euros in kroner.
According to the company’s announcement, proceeds from the sale and issuance of bonds will be used to repay the entire secured debt. The creditors are DNB through a new loan granted last year, the fund manager Hayfin, as well as the shipyards that built drilling platforms for Borr. In addition, there is a previous covered bond that is also being paid off.
Must review dividends
Trøim founded Borr in 2016, around the height of the oil services market downturn that followed the oil price collapse in 2014-2015. The company bought drilling rigs at discounted prices, in a big bet on a recovery that was much slower than many expected. Things got even worse during the corona pandemic and Borr had to raise money in several rounds to get creditors to accept a postponement.
But with the energy crisis that started in late 2021 and was amplified by the war in Ukraine, there has been a solid rebound in several offshore segments, including oil rigs. Borr has won contracts for the entire fleet and has an order book of more than NOK 21 billion, and has promised to look at dividends if the debt situation is in order.
The stock is still a long way from the highs of 2018 and even pre-pandemic, but is up more than 85 percent this year. (Conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases via links that lead directly to our pages. Copying or other use of all or part of the contents may only be made with written permission or as permitted by law. For further conditions see here.
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Published: 19.01.21 — 01:00
Borr Drilling with major refinancing – selling shares at a mini discount
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