Borr Drilling — Share Issue/Capital Change 2020

Jun 5, 2020

Borr Drilling Limited - Completing financial restructuring and conditions for equity offering

Borr Drilling Limited - Completing financial restructuring and conditions for equity offering

Reference is made to Borr Drilling Limited's ("Borr Drilling" or the "Company")

(NYSE: BORR, OSE: BDRILL) stock exchange notices dated May 20 and May 21, 2020.

The Company is pleased to announce it has obtained significant amendments to

facilities from its secured lenders and shipyards that will provide total

liquidity improvement of more than $315 million in the period to the first

quarter of 2022. These amendments have now been agreed with the following key

terms:

· Deferral of the delivery of five newbuild jack-ups rigs until mid-2022,

representing estimated liquidity improvement of approximately $190 million until

the first quarter of 2022.

· Deferral of certain interest payments until 2022, representing an estimated

liquidity improvement of approximately $60 million.

· Deferral of debt amortisation in 2021 of $65 million until maturity of the

loans in the second quarter of 2022.

· Amendment of certain of the financial covenants, including

· Reduction of the minimum liquidity covenant from 3% of net interest

bearing debt, to $5 million with a gradual step-up to $20 million at December

31, 2021, which gives a liquidity improvement of up to $40 million in the

period. Thereafter the 3% level will be reinstated. As part of the amendments,

utilization of the remaining $30 million under our revolving credit facilities

require all banks' consent.

· Amending the minimum book equity ratio from 33.3% to 25% up to and

including 31 December 2021. Thereafter the required ratio will be 40%.

· Suspension of the Debt Service Coverage Ratio covenant of 1.25x until 31

December 2021.

· Waivers of certain covenants in our ring-fenced financing structure

including incremental liquidity from restricted cash.

The amendments provide for payment of certain interest payments originally due

at the end of the first quarter of 2020 which had been deferred with lender

consent, as well as other amendments to the facilities.

"We are extremely pleased with the support given to the Company by all

stakeholders. The amended financing package gives a required cash break-even

bareboat contribution in 2021 at only around $20,000/day per rig based on just

12 rigs in operation. In addition, the Company has six more rigs activated and

available, which it only intends to bring back to work on cashflow accretive

contracts. We are also encouraged by the already improving supply-demand outlook

for oil, and optimistic that this will lead to a gradual improvement in jack-up

drilling activity in the coming year. We furthermore continue to look at

additional initiatives to improve liquidity", says Chairman Paal Kibsgaard.

The agreements are conditional on the issuance of 46,153,846 new shares to the

subscribers of the $30 million equity offering, which is expected to be settled

June 5, 2020.

A Special General Meeting of the shareholders of the Company was held on June 4,

2020 at 9:30 a.m. at the Company's Registered Office, 2nd Floor, 9 Par-la-Ville

Road, Hamilton HM11, Bermuda, passing the following resolution: "That the

Company's authorised share capital be increased from US$6,875,000 divided into

137,500,000 common shares of US$0.05 par value each to US$9,182,692.30 divided

into 183,653,846 common shares of US$0.05 par value each by the authorisation of

an additional 46,153,846 common shares of US$0.05 par value each."

June 5, 2020

Hamilton, Bermuda

This announcement does not constitute an offer to buy, sell or subscribe for any

securities described herein. The securities offered will not be or have not been

registered under the Securities Act of 1933 and may not be offered or sold in

the United States absent registration or an applicable exemption from

registration requirements.

FORWARD LOOKING STATEMENTS

This announcement includes forward looking statements. Forward looking

statements are, typically, statements that do not reflect historical facts and

may be identified by words such as "anticipate", "believe", "continue",

"estimate", "expect", "intends", "may", "should", "will" and similar expressions

and include statements with respect to the amendments agreed with creditors,

including expected liquidity improvements from those amendments; the Company's

plans to continue to look for initiatives to improve liquidity; expected cash

bareboat break even rates; intentions with respect to bringing rigs back to

work; statements with respect to expected supply-demand outlook for oil, and

expected trends in jack-up drilling activity in the coming yea; and other non

-historical statements. The forward-looking statements in this announcement are

based upon various assumptions, many of which are based, in turn, upon further

assumptions, which are, by their nature, uncertain and subject to significant

known and unknown risks, contingencies and other factors which are difficult or

impossible to predict and which are beyond our control. Such risks,

uncertainties, contingencies and other factors could cause actual events to

differ materially from the expectations expressed or implied by the forward

-looking statements included herein. Important factors that could cause actual

results to differ materially from those discussed in the forward looking

statements include risks relating to the amendments we have agreed with lenders

and shipyards, including the risks relating to meeting conditions precedent and

subsequent to these agreements; risks relating to our liquidity including the

risk that we may have insufficient liquidity to fund our operations; risks that

the expected liquidity improvements do not materialize, the risk that our

customers do not comply with their contractual obligations, including payment or

approval of invoices for factoring; , risks relating to industry conditions and

tendering activity, risks relating to cash flows from operations, the risk that

we may be unable to raise necessary funds through issuance of additional debt or

equity or sale of assets and may have to delay or cancel discretionary capital

expenditures; risks relating to our debt instruments including risks relating to

our ability to comply with covenants and obtain any necessary waivers and the

risk of cross defaults, as well as those risks described in the section entitled

"Risk Factors" in our filings with the Securities and Exchange Commission.