Keppel Corp has agreed to delay the delivery of five jack-up drilling rigs to Borr Drilling as part of the Norwegian company’s restructuring efforts.
The five jack-up rigs are part of a series of 11 jack-ups ordered by Borr Drillling, six of which have been delivered to date.
Late last month, Borr Drilling began discussions with lenders and yards to postpone yard commitments, adjust covenants and reduce amortisation as well as defer cash interest payment to strengthen its liquidity situation in response to the weakening market.
Based on the original schedule, three out of the five rigs were due for delivery by the third quarter of this year and the remaining two rigs by early 2022.
One rig will now see its delivery deferred to the second quarter of 2022, while the remaining four rigs are to be handed over by the third quarter of 2022.
Borr Drilling will pay holding costs and/or cost cover of all deferred deliveries. Of the six delivered rigs, three have been paid in full, Keppel said.
Similar to the original contracts with Borr Drilling, three of the delivered rigs will remain partially financed by Keppel through a seller’s credit arrangement of about $272.7m in aggregate.
Two out of the five rigs which are to be delivered in 2022 will on delivery be partially financed by Keppel through a seller’s credit arrangement, and on delivery Keppel will have a first lien in respect to both rigs.
Another two of the five rigs will also on delivery be partially financed by Keppel through a seller’s credit arrangement and Keppel will likewise have a first lien in respect of these two rigs.
The seller’s credit arrangements will amount to about $415.3m in aggregate. Keppel said there is no seller’s credit arrangement for the fifth rig.
