HAMILTON, Bermuda - Borr Drilling Limited (NYSE and OSE: BORR) has announced the pricing of its $150 million senior secured notes offering, with a 10% interest rate and a 2028 maturity date. The additional notes are to be issued under the same terms as the existing $1.225 billion senior secured notes due the same year.
The company stated that the net proceeds from the sale of the additional notes would be used primarily to cover the acquisition and activation costs of the newbuild rig "Vali". This strategic move replaces the previously arranged yard financing for the rig, as the terms of the new notes were deemed more favorable. Additionally, funds will be allocated for general corporate purposes, including debt service.
In other recent news, Borr Drilling Limited reported robust Q1 results, highlighted by high technical and economic utilization rates and an increased adjusted EBITDA margin. The company also raised its quarterly dividend, signaling confidence in its financial health and future prospects. Borr Drilling's technical utilization reached 99%, and economic utilization was at 98.6%, while the adjusted EBITDA margin for the quarter rose to 47.2%.
The company has a revenue backlog of $318 million and plans to expand its fleet with two new builds by the end of the year. Despite some market challenges, including an oversupply of rigs and a suspension of one of its 20 rigs in Saudi Arabia, Borr Drilling remains optimistic. The company is actively considering acquisitions and anticipates continued high demand for rigs in West Africa, Southeast Asia, and India. These are among the recent developments for Borr Drilling Limited.
InvestingPro Insights
Borr Drilling Limited (NYSE: BORR) has recently made headlines with its strategic financial moves, including the issuance of $150 million senior secured notes. As investors consider the implications of this decision, several metrics and tips from InvestingPro can provide deeper insights into the company's financial health and prospects.
InvestingPro Data indicates that Borr Drilling has a market capitalization of approximately $1.52 billion, with a P/E ratio of 34.46. This valuation comes in the context of a notable revenue growth of 56.16% over the last twelve months as of Q1 2024, showcasing the company's significant increase in sales. Furthermore, the gross profit margin stands at a healthy 55.96%, reflecting efficient cost management relative to revenue.
Among the InvestingPro Tips, it is highlighted that Borr Drilling operates with a significant debt burden, which is an important consideration given the new issuance of senior secured notes. However, analysts predict that the company will be profitable this year, and the net income is expected to grow, which could signal a positive outlook for the company's earnings capacity.
Additionally, Borr Drilling is trading at a low P/E ratio relative to its near-term earnings growth, suggesting that the stock may be undervalued when considering its growth potential. This is further supported by the company's PEG Ratio of 0.31, which can be a signal to investors looking for growth at a reasonable price.
For those interested in further analysis, InvestingPro offers a comprehensive list of additional tips for Borr Drilling, which can be found at https://www.investing.com/pro/BORR. With these insights, investors can make more informed decisions as they assess Borr Drilling's financial trajectory and its latest capital market activities.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.