Borr Drilling Expands Fleet with Strategic Acquisition
Borr Drilling Limited (NYSE: BORR) has announced a significant agreement to acquire five premium jack-up rigs from Noble Corporation. This strategic move, valued at approximately $360 million, involves the acquisition of three advanced Friede & Goldman JU-3000N design rigs and two Gusto MSC CJ50 design rigs. The addition of these rigs is set to enhance Borr Drilling’s operational capabilities and provide a stronger foothold in the market.
With these acquisitions, Borr Drilling will see its fleet expand from 24 to 29 rigs, solidifying its position as the owner of the youngest and most modern premium jack-up fleet in the global offshore drilling market. The integration of these new rigs is expected to complement the existing fleet's specifications and geographical deployment, allowing Borr to enhance the value of its services while meeting the increasing demands of clients.
Financial Structure of the Acquisition
The financing for this acquisition will be structured through several channels: initially, the company plans to raise an additional $150 million from its existing 10.375% Senior Secured Notes due 2030. Furthermore, a seller's credit of $150 million will be established, maturing in 2032, alongside an $85 million equity raise to fund this strategic investment.
The incorporation of two rigs will be under bareboat charters back to Noble Corporation for a duration of 12 months. This arrangement allows for the completion of existing drilling contracts while generating an estimated total of $29 million in earnings before debt service during this transitional period. This operational strategy provides Borr Drilling with earnings and cash flow certainty, enhancing financial stability during the integration phase.
Management's Perspective on the Acquisition
Bruno Morand, the Chief Executive Officer of Borr Drilling, expressed confidence in this acquisition, highlighting it as a compelling strategic opportunity. He noted, “We are acquiring these rigs at an attractive price during a time when demand for jack-up rigs is strengthening. This transaction is anticipated to immediately enhance our Adjusted EBITDA and optimize our debt per rig. Our platform, focused on operational excellence and customer service, remains a formidable competitive advantage.”
Morand also emphasized that this expanded fleet will facilitate deeper relationships with customers and promise significant long-term value to shareholders. The planned closing of the acquisition is projected for the first quarter of 2026, contingent upon the successful completion of the financing arrangements and standard closing conditions.
Future Listings and Strategic Plans
In addition to the acquisition plans, Borr Drilling is initiating steps to list its shares on Euronext Growth Oslo as a precursor to potentially relisting on the Oslo Stock Exchange. This decision reflects a strong interest from investors and a constructive dialogue with financial partners, demonstrating the company's commitment to enhancing its market presence.
Borr Drilling's Board is mindful of the complexities associated with dual listings versus the opportunities presented by maintaining a dual-market presence. The potential benefits of this strategy signal a proactive approach to meet the expectations of stakeholders and capitalize on favorable market conditions.
Detailed insights regarding the acquisition have been compiled into a presentation available on the company's official website, ensuring stakeholders and interested parties have access to pertinent information about the continuing development of Borr Drilling.
Frequently Asked Questions
What was the total purchase price for the rig acquisition?
The total purchase price for the acquisition of the five premium jack-up rigs is approximately $360 million.
How will the acquisition impact Borr Drilling's fleet size?
The acquisition will increase Borr Drilling's fleet size from 24 to 29 rigs.
What financing methods will Borr Drilling use for this acquisition?
The acquisition will be financed through existing Senior Secured Notes, a seller's credit, and an equity raise.
When is the expected closing date for the acquisition?
The acquisition is expected to close in the first quarter of 2026, pending customary closing conditions.
What are the future listing plans for Borr Drilling's shares?
Borr Drilling plans to list its shares on Euronext Growth Oslo as a step towards relisting on the Oslo Stock Exchange.
