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On Tuesday, Tor Olav Trøim’s rig company, Borr Drilling, announced that new funding arrived, raising $ 27.5 million.
On Friday, the crisis-hit rig company released a prospectus of the company’s future plans. It states that the group’s working capital does not provide sufficient room for maneuver for the group’s current needs for at least 12 months from the date of the prospectus.
The reason is that the company, according to the prospectus, will only have available working capital of about $ 5 million in December.
This is not enough given future earnings uncertainty due to the crown crisis, according to Borr Drilling.
“Given the uncertainty in the global economy as a result of the COVID-19 pandemic and the impact this has on our ability to reliably predict future operational performance, this level is not considered sufficient for the company to reasonably conclude that the Working capital available to the group is sufficient for the current needs of the company for the period spanning at least 12 months from the date of this prospectus, ”the company writes.
More opportunities to improve cash flow
However, the company’s management and board of directors have already proven capable of raising money, Borr Drilling notes in the report.
In addition, the company notes that any new platform contract or extension of current contracts increases cash flow and provides greater operating room to maneuver. The same applies to other cost-cutting programs, writes Borr Drilling.
After the lowest point in December, Borr Drilling calculations show that the company will have more than $ 31 million to spend by the end of September 2021.
Will manage if everything goes according to plan
– We just raised $ 27.5 million in a share issue and have also reached an agreement with banks to postpone interest payments due on New Years for 12 months, says Borr Drilling’s director of investor relations, Magnus Vaaler.
In addition, he points out that the company has received an agreement to defer loan deductions until 2023.
– These are measures that we have taken and we believe that they will be maintained to survive, if everything goes according to plan. With the problem, we believe that we can have a clear path until 2022, says Vaaler.
Trøim’s drilling company originally wanted to raise $ 40-50 million in a private placement, but the company later decided to reduce this amount to $ 25-30 million.
– It is clear that we are very cost conscious during the day, we have several platforms in circulation that it will cost to start over, says Vaaler.
He also notes that the company will launch two new platforms in the North Sea this winter.
– Then at first you get a little negative pull on working capital, and then the income comes later.
Spit on 23 mill.
Borr Drilling has not done so well. Norwegian investor Tor Olav Trøim, John Fredriksen’s former right-hand man, founded Borr in 2016 and listed it the following year with a market value of just over NOK 9 billion.
When the coronavirus paralyzed the entire world and the price of oil plummeted, there was a climate of crisis for the company.
On Wednesday, the company announced that Tor Olav Trøim had signed for NOK 23 million on the Borr Drilling issue affected by the crisis. When the company raised money at the end of May, Trøim participated with NOK 5 million.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content can only be done with written permission or as permitted by law. For more terms, see here.
