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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.
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