Oslo-listed rig contractor Borr Drilling is trying to calm investors and creditors after media reports of Norwegian bank DNB and other creditors planning to take over the company.

Borr, which is controlled by Norwegian billionnaire Tor Olav Troim, is currently in the process of executing a liquidity improvement plan and equity raise.

However, Upstream's sister publication, Norwegian business daily Dagens Naeringsliv (DN), on Wednesday reported that Borr’s largest creditor DNB and other creditors have drawn up an alternative plan that will enable them to take over, split up and sell Borr.

https://www.dn.no/oljeservice/borr-drilling/tor-olav-troim/dnb/dnb-vurderer-a-ta-over-dele-opp-og-selge-tor-olav-troims-riggselskap-borr-drilling/2-1-942585

According to DN, DNB and another of the company's most important creditors, the UK fund Hayfin, are losing patience. In a confidential document from DNB, to which DN has access, it appears that the bank last week presented a dramatic alternative plan that could be implemented if Borr does not succeed in establishing a restructuring agreement with its creditors.

The so-called backup plan — codenamed "Project Eleven" — involves the banks and Hayfin, which specialises in debt investments, taking over the company, splitting it up and selling it.

They would take over and retain a company with 11 of Borr's rigs.

Bondholders with no collateral in assets would receive 2% of the shares, and the new management 1%.

The banks and Hayfin would provide this company with $110 million in fresh capital, in a loan guaranteed by DNB and Hayfin.

This company would then be "very well positioned for mergers and acquisitions" or "other exit opportunities", according to the DNB note.

Borr wasted no time in responding to the article, which referenced the potential alternative plan discussed by two creditors.

Borr said: “The board and management are highly confident that the company can execute the liquidity improvement plan and equity raise as announced in a press release on 24 December 2020.

"The company is working closely and constructively with all lenders to achieve the best possible solution for all stakeholders.”

Finance

Troubled drilling contractor Borr takeover touted: Report