Borr Drilling Limited – Contemplated Equity Offering of up to USD 30 Million

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN, HONG KONG, THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO BUY, SELL OR SUBSCRIBE FOR ANY SECURITIES DESCRIBED HEREIN.

Hamilton, Bermuda, 20 May 2019

With reference to today’s trading update, Borr Drilling Limited (the “Company” or “Borr Drilling”) (NYSE: BORR, OSE: BDRILL) has been in discussions with the Company’s creditors and ship yards, in order to strengthen the Company’s liquidity position by deferring certain yard commitments, adjustments in covenants, deferred amortization and deferral of certain interest payments. The target has been to create a run-way for the next 2 years even in the unlikely scenario that no new contracts are entered into or renewed.

The target of the above mentioned plan is to improve the liquidity until the beginning of 2022 by USD 315 million, and lower the Company’s cash bareboat break-even rate to $20k/day until the end for 2021. This number is calculated based full SG&A, stacking and cash interest cost. This number is based on only 12 out of 23 rigs delivered rig being in operation.

In order to reach agreement with the ship yards and the creditors, Borr Drilling is contemplating to offer up to USD 30 million in new depositary receipts (the "Offer Shares"), representing the beneficial interests in the same number of the Company’s underlying common shares, each with a par value of USD 0.05 (the “Equity Offering”). The subscription price will be set through an accelerated bookbuilding process to be conducted by the Managers (as defined below) (the "Subscription Price"). The net proceeds from the Equity Offering will be used for strengthen the Company’s working capital and general corporate purposes.

The bookbuilding period opens today at 23:00 CET/5:00pm EST on 20 May 2020 and ends at 22:00 CET/4.00Pm EST on 21 May 2020. The Company may at its own discretion extend or shorten the bookbuilding period at any time and for any reason.

The minimum application and allocation amount in the Equity Offering has been set to the USD equivalent of EUR 100,000. The Company may, at its sole discretion, allocate an amount below EUR 100,000 to the extent applicable exemptions from relevant prospectus and registration requirements are available.

Completion of the Equity Offering is subject to, (i) the approval by the SGM to be held on 4 June 2020 of the increase of the Company’s authorized share capital, (ii) approval from  secured lenders of amendments to facilities, including amortization and interest deferrals and financial covenant amendments and reaching final agreement with one its yards to defer certain yard commitments for total liquidity improvement of USD 315 million through Q1 2022, (iii) the Company’s board resolving to consummate the Equity Offering and allocate the Offer Shares, and (iv) the Offer Shares including the new common shares having been fully paid and legally issued. Each applicant acknowledges that the Equity Offering will be cancelled if the conditions are not fulfilled.

Allocation of the Offer Shares will be determined at the end of the application period, and final allocation will be made by the Company's Board of Directors at its sole discretion, with preference for existing shareholders. Notification of the allocation is expected to be sent by the Managers on or about 21 May 2020.

The date for settlement of the Equity Offering is expected to be on or about 5 June 2020 (the “Settlement Date”). The Offer Shares, representing the beneficial interests in the same number of common shares in the Company, will only be listed on the OSE. No Offer Shares will be offered or sold in transactions on the NYSE.

The Offer Shares, each representing the beneficial interest to one underlying common share in the Company, will be settled by: (i) utilizing new depositary receipts under the 20% EEA prospectus listing exception; (ii) utilizing existing and unencumbered depositary receipts in the Company in excess of those covered by (i), that are already listed on the OSE, pursuant to a swap agreement between the Global Coordinator, the Company, Schlumberger Oilfield Holdings Ltd., Magni Partners (Bermuda) Ltd., and Drew Holdings Ltd. (the “Swap Agreement”); and (iii) obtaining the acceptance from some of the Investors in the Equity Offering to receive and hold unlisted Offer Shares, registered on a separate ISIN, pending the approval of a listing prospectus, for the Offer Shares in excess of those covered by (i), by the Norwegian Financial Supervisory Authority (the “NFSA”), expected to take place early July 2020. The Global Coordinator will settle the Swap Agreement through the issuance of unlisted Offer Shares to Schlumberger Oilfield Holdings Ltd., Magni Partners (Bermuda) Ltd., and Drew Holdings Ltd., which also will be placed on a separate ISIN pending publication of the listing prospectus approved by the NFSA, cf. (iii) above. The Company and the Managers reserve the right, at any time and for any reason, to cancel and/or modify the terms of the Equity Offering.

The Equity Offering will be carried out as a private placement and the Board of Directors of the Company is of the opinion that this is in the best interest of the Company and its shareholders. The Board of Directors has taken into consideration, among other things, the fact that the Equity Offering will provide necessary liquidity and raise capital more quickly and, at an attractive price, compared to a rights issue.

The Equity Offering is directed towards investors subject to applicable exemptions from relevant prospectus requirements, (i) outside the United States to non-US persons in reliance on Regulation S under the US Securities Act of 1933 (the “US Securities Act”) and (ii) in the United States to “qualified institutional buyers” (“QIBs”) as defined in Rule 144A under the US Securities Act in transactions that are exempt for registration under the US Securities Act.

Clarksons Platou Securities AS has been retained as Global Coordinator and Bookrunner, and Fearnley Securities AS and Pareto Securities AS as Joint Lead Managers and Bookrunners (together referred to as the “Managers”).

This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

Important note

This announcement is not being made in or into the United States of America, Canada, Australia, Japan, Hong Kong or in any other jurisdiction where it would be prohibited by applicable law. This distribution does not constitute or form part of an offer or solicitation of an offer to purchase or subscribe for securities in the United States. The shares referred to herein will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration under that act.