Borr Drilling has made a $1.3bn swoop for nine jack-up rings from Singapore's Sembcorp Marine with founder Tor Olav Troim dipping in to his own pocket to support the deal.
The purchase is to be funded partly with a $650m equity raise, which was completed on Monday and saw Schlumberger further its involvement with the firm.
Six of the rigs involved in the swoop are already completed ,with the first to be delivered in the fourth quarter.
Three other units are at various stages of construction at PPL Shipyard, which last week cancelled contracts for three jack-ups originally built for Mexican drilling contractor Oro Negro.
Analysts at Arctic Securities says the purchase price is fair given the well known yard and design and the fact builders in the sector are "stressed’, not distressed".
Debt and equity in place
Borr has again tapped investors to support its expansion with 162,500,000 new shares offered at $4 each.
Companies associated with chairman Troim bought $25m of the stock on offer, according to a statement released this morning.
Major shareholder Schlumberger has taken $50m, which will give it a 15.8% stake. Borr has also said it will work with Schlumberger to offer performance-based drilling deals.
ABG Sundal Collier, Clarksons Platou Securities, DNB Markets, Fearnley Securities, Pareto Securities , Skandinaviska Enskilda Banken, Sparebank 1 Markets acted as joint lead managers and book runners of the offering.
The debt piece will account for $753m, with Borr getting five-year financing at "attractive terms," it said.
The lender on the debt side will also be entitled to 25% of the uplift in the market value of the rigs, subject to certain terms. No fee is expected to be paid to seller unless the rig value exceeds $190m after five years, Borr said.
Following the transaction, Oslo Merkur-listed Borr, which Troim started last year, will have a fleet of 22 rigs following the deal.
The stable will be the newest fleet of jack-ups in the market.
Borr has risen fast with the company now the third largest driller in the world by market capitalisation just 10 months after being established. It also has the lowest debt load among its public peers.
