Borr Drilling Ltd 6-K, filed Mar 2, 2020
Borr Drilling Ltd (BORR)
6-K
2020-03-02
For: 2020-02-28
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Added on
April 10, 2026
About this 6-K
Borr Drilling Ltd filed this 6-K on March 2, 2020.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of February 2020
Borr Drilling Limited
S. E. Pearman Building
2nd Floor 9 Par-la-Ville Road
Hamilton HM11
Bermuda
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Financial Statements and Exhibits.
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Exhibit
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Description
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Presentation dated February 28, 2020
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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BORR DRILLING LIMITED
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Date:
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February 28, 2020
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By:
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/s/ Svend Anton Maier
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Svend Anton Maier
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Chief Executive Officer
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Exhibit 99.1
Borr Drilling Limited Q4 2019 results presentation28 February 2019
Important information and disclaimer 2 This presentation (the “Presentation”) has been prepared by
Borr Drilling Limited (the “Company”) and sets forth general background information about the Company's activities current as at the date hereof. Information in this Presentation, including forecast financial information, should not be
considered as advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities or other financial products or instruments and does not take into account your particular investment
objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information having regard to these matters, any relevant offer document and in particular, you should seek independent
financial advice. All transactions in securities and financial product or instrument involve risks, such risks include (among others) the risk of adverse or unanticipated market, financial or political developments and, in international
transactions, currency risk.No representation, warranty, or undertaking, express or implied, is made by the Company, its affiliates or representatives, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of
the information or the opinions contained herein, for any purpose whatsoever. Neither the Company nor any of their advisors or representatives shall have any responsibility or liability whatsoever (for negligence or otherwise) for any loss
howsoever arising from any use of this Presentation or its contents or otherwise arising in connection herewith. All information in this Presentation is subject to updating, revision, verification, correction, completion, amendment and may
change materially and without notice. Neither the Company or its affiliates or agents undertake any obligation to provide the recipient with access to any additional information or to update this Presentation or any information or to correct
any inaccuracies in any such information. The information contained in this Presentation should be considered in the context of the circumstances prevailing at the time and has not been, and will not be, updated to reflect material developments
which may occur after the date hereof.Matters discussed in this Presentation and any materials distributed in connection herewith may constitute or include forward-looking statements. Forward-looking statements are statements that are not
historical facts and may be identified by words such as “believes”, “expects”, “anticipates”, “intends”, “estimates”, “will”, “may”, “continues”, “should” and similar expressions. These forward-looking statements reflect the Company’s beliefs,
intentions and current expectations concerning, among other things, the Company’s results of operations, financial condition, liquidity, prospects, growth and strategies. Forward-looking statements include statements regarding: objectives,
goals, strategies, outlook and growth prospects; future plans, events or performance and potential for future growth; liquidity, capital resources and capital expenditures; economic outlook and industry trends; developments of the Company’s
markets; the impact of regulatory initiatives; and the strength of the Company’s competitors. Forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the
future. The forward-looking statements in this Presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends,
data contained in the Company’s records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown
risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Forward-looking statements are not guarantees of future performance and such risks, uncertainties,
contingencies and other important factors could cause the actual results of operations, financial condition and liquidity of the Company or the industry to differ materially from those results expressed or implied in this Presentation by such
forward-looking statements. No representation is made that any of these forward-looking statements or forecasts will come to pass or that any forecast result will be achieved and you are cautioned not to place any undue influence on any
forward-looking statement.This Presentation and the information contained herein does not constitute or form a part of, and should not be construed as, an offer for sale or subscription of or solicitation or invitation of any offer to subscribe
for or purchase any securities of the Company and neither this Presentation nor anything contained herein shall form the basis of, or be relied on in connection with, any offer or commitment whatsoever. By reviewing this Presentation, you
acknowledge that you will be solely responsible for your own assessment of the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of
the Company’s business.By reviewing this Presentation, you are deemed to have represented and agreed that you and any persons you represent are located outside of the United States. This Presentation is only addressed to and directed at persons
in member states of the European Economic Area who are “qualified investors” as defined in the Prospectus Directive (Directive 2003/71/EC) (“Qualified Investors”). In addition, in the United Kingdom, this Presentation is being distributed only
to, and is directed only at (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 as amended (the “Order”) or (ii) high net worth entities and other persons to
whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together as amended being referred to as “Relevant Persons”). This Presentation must not be acted on or relied on (i) in the United
Kingdom, by persons who are not Relevant Persons, and (ii) in any member state of the European Economic Area other than the United Kingdom, by persons who are not Qualified Investors. Any investment or investment activity to which this document
relates is available only to Relevant Persons or Qualified Investors or will be engaged in only with Relevant Persons or Qualified Investors.The information in this Presentation is given in confidence and the recipients of this Presentation
should not base any behaviour in relation to qualifying investments or relevant products, as defined in the Financial Services and Markets Act 2000 (“FSMA”) and the Code of Market Conduct, made pursuant to the FSMA, which would amount to market
abuse for the purposes of the FSMA on the information in this Presentation until after the information has been made generally available. Nor should the recipient use the information in this Presentation in any way that would constitute “market
abuse”.Neither this document nor any copy of it may be taken, released, published, transmitted or distributed, directly or indirectly, in or into the United States, Canada, Australia or Japan. Any failure to comply with this restriction may
constitute a violation of United States, Canadian, Australian or Japanese 4C Securities laws. This document is also not for publication, release or distribution in any other jurisdiction where to do so would constitute a violation of the
relevant laws of such jurisdiction nor should it be taken or transmitted into such jurisdiction and persons into whose possession this document comes should inform themselves about and observe any such relevant laws. No money, securities or
other consideration is being solicited, and, if sent in response to this Presentation or the information contained herein, will not be accepted.
Highlights Q4 and full year 2019 3 Total operating revenues of $92.9 million, net loss of $69.3
million and Adjusted EBITDA of $1.8 million for the fourth quarter of 2019Total operating revenues of $334.1 million, net loss of $308.1 million and Adjusted EBITDA of $(2.6) million for the full year 2019Net loss includes includes $16.4
million accounting loss in equity method investments.Sold marketable securities, resulting a total realised loss of $15.4 million, and improving the liquidity position by $27.1 millionAgreed amendments in bank loan covenants to adjust minimum
book equity ratio from 40% to 33.3% and the minimum free liquidity covenant from 4.0% to 3.0% of net interest bearing debt Entered into a new $100 million financing arrangement for the newbuild jack-up rig Tivar, scheduled to be delivered from
the yard in July 2020, maturing December 31, 2021. As part of the Tivar agreement, the delivery of the rigs Vale and Var are expected in Q1 2022 The Company uses certain financial information calculated on a basis other than in accordance with
accounting principles generally accepted in the United States (US GAAP) including Adjusted EBITDA. Adjusted EBITDA as used herein represent net loss less: depreciation and impairment of non-current assets, amortisation of contract backlog, net
financials, gain from bargain purchase and income tax expense. Adjusted EBITDA is included as a supplemental disclosure because the Company believes that the measure provides useful information regarding the Company’s operational performance.
Key Financials Q4 2019 4 Income Statement USDm FY 2019 Q4 2019 Q3 2019 Operating
revenues 334.1 92.9 102.7 Gain on disposals 6.4 2.6 - Rig operating and maintenance expenses (307.9) (81.6) (87.9) Depreciation (101.4) (27.1) (25.8) Impairment (11.4) - - Amortisation of contract
backlog (20.2) (1.6) (4.1) G&A (50.4) (15.4) (10.9) Total operating expenses (491.2) (125.7) (128.7) Operating loss (150.7) (30.2) (26.0) Loss from equity method investments (18.0) (16.4) (1.6) Financial
income (expenses) (128.1) (18.0) (47.8) Loss before income taxes (296.9) (64.6) (75.4) Tax (11.2) (4.7) (3.8) Net loss (308.1) (69.3) (79.2) Comments Q4 2019 Revenues decreased quarter on quarter mainly due to less
operating daysRig operating and maintenance expenses decreased due to: Lower amortisation of mobilisation costs of $4.1millionAmortization of contract backlog relates to acquired contracts from the Paragon transactionG&A increased by $4.5
million mainly due to one-off feesLoss from equity method investments related mainly to an unplanned geological event in our IWS joint venture in Mexico Total financial expenses, main itemsNet interest expense of $23.6 million Mark-to-market
gains of $7.5 million on forward contractsRealised loss from sale of debt securities of $15.4 million since purchase, loss during the quarter was $3.4 millionMark-to-market gain of $1.9 million on the Call Spread derivative related to the
convertible bonds
Key Financials Q4 2019 5 Balance Sheet Key Numbers USDm Q4 2019 Q3 2019 Q4 2018 Total assets
3,280.0 3,199.5 2,913.7 Total liabilities 1,994.9 1,848.6 1,380.2 Total equity 1,285.1 1,350.9 1,533.5 Cash and cash equivalents 59.1 39.5 27.9 Restricted cash 69.4 77.1 63.4 Comments Q4 2019 Total
assets increased by US$80.5 million due to delivery of one newbuild, “Hermod”, offset by depreciationTotal liabilities increased by US$146.3 million, mainly attributable to $90.1 million in long-term debt for the delivery of Hermod$30.0 million
drawdown in bank debt$12.7 million in liabilities from equity method investmentsTotal available free liquidity (excluding restricted cash) was $94.1 million, including undrawn amounts under credit facilities of $35.0 million.
Fleet Status Report February 2020 6 Contractual Developments Other Fleet Updates * Includes Eir,
which is under sales agreement, expected to be concluded early 2020, subject to conditions Time Rig Client Contract Status Oct-19 Galar Pemex Contract: Q1 2020 to Q2 2021 Oct-19 Njord Pemex Contract: Q1 2020 to Q2
2021 Nov-19 Saga Eni Contract: Q1 2020 to Q2 2020 Nov-19 B152 ADOC/ADNOC 9 Months Contract Extension from Nov 30 Dec-19 Prospector 5 CNOOC Contract: Q3 2020 to Q3 2021 Jan-20 Idun JVPC Contract: Q1 2020 to Q3
2020 Dec-19 Prospector 5 Neptune 2 Months Contract Extension from Dec 31 Jan-20 Prospector 5 Perenco Contract: Q1 2020 to Q3 2020 Jan-20 Mist ROC Oil LOA: Q2 2020 to Q4 2020
From 0 to 19 rigs in operations – achieved critical mass in all regions 7 Growth from 1 to 19 rigs
after 26 months in operations 19 operating rigs Mar-20 1 operating rigDec -17 99.0% technical utilization in 2019
Jack-up demand growing – shallow water has lowest break even cost 8 US onshore rig count Floater rig
count Jack-up rig count Source: Bloomberg and IHS, Rystad -15% +6% +27% Break-even USD55/bbl Break-even USD45-50/bbl Break-even USD18-40/bbl
Jack-up demand growing – shallow water has faster payback 9 Jack-up demand is mainly brownfield Core
countries are drilling significantly more today Source: IHS Petrodata, DNB Markets, Borr Drilling # Jack-ups Outstanding and expected tenders Brownfield Greenfield Exploration Greenfielddevelopment Infill
drilling Workover P&A 3% 2% 6 months 3 months 2 years 3 years 7 years 3-4 years 1 year 6 months Time to first oil
Modern replacing standard rigs – Borr very well positioned 10 Marketed Utilization continues to trend
upwards… Modern JU availability is tight … while market bifurcation continues to play out Source: IHS, Borr Drilling Marketed Utilization (%) Modern (>=2000) Standard (<2000) Average 234 113 193 223 + 49% -49% Supply and
Demand matrix Modern rigs # of rigs Total fleet 305 Not marketed 16 Marketed fleet 289 Marketed utilisation 91% Contracted fleet 263 166 130
Available modern rig capacity largely depleted – Borr very well positioned 11 Visible incremental
demand Borr controls > 1/3 of available capacity Only 12 rigs with same standard as the Borr rigs left # units stranded in yards down 87 Middle East 19 Mexico 10 South-east Asia 7 West Africa 3 India 2 Rest of the
world ? Total >41
Industry backlog and contract length increasing – dayrate increases to continue 12 Trailing 12 months
contracted days back at 2013 peak Average contract length past 2013 peak IHS
Forward utilisation now at 2012 levels 13 Forward utilisation all jack-ups Forward utilisation
premium jack-ups Average 6 month forward utilisation 59%Average 1 year forward utilisation 51%Average 2 year forward utilisation 39%2012: Premium JU day-rate USD151k/day
Jack-up market approaching inflection point of utilisation and dayratesBorr very well positioned in all
key operating regions2020 focus on strengthening balance sheet and cashflow building on:Activity having reached critical massStringent rig activation criteriaTight control on cost and working capitalStrategic and opportunistic asset salesAiming
for positive operating income and operating cashflow for 2020 Summary 14
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