February 22, 2018 / 7:59 AM / 6 months ago

BRIEF-Borr Drilling offers $232.5 mln for Paragon Offshore

Feb 22 (Reuters) - Borr Drilling Ltd:

* SAYS IT HAS RECEIVED COMMITMENTS FROM HOLDERS OF 67.9% OF PARAGON'S SHARES FOR ITS TENDER OFFER WHICH WILL BE MADE TO ALL SHAREHOLDERS IN PARAGON

* ‍TOTAL ACQUISITION PRICE FOR ALL OUTSTANDING SHARES IS ESTIMATED AT USD232.5 MILLION​

* PARAGON IS AN INTERNATIONAL DRILLER WITH A FLEET OF 32 DRILLING UNITS AS PER JANUARY 2018​

* ‍ACQUISITION WILL BE FINANCED THROUGH CASH ON BALANCE SHEET AND ISSUANCE OF EQUITY AND/OR DEBT INSTRUMENTS​

* ‍ACQUISITION IS EXPECTED TO CLOSE IN MARCH 2018​

* TOTAL OPERATING EXPENSES WERE US$62.4 MILLION FOR THE THREE MONTHS ENDED DECEMBER 31‍​

* OPERATING REVENUES WERE US$0.1 MILLION FOR THE THREE MONTHS ENDED DECEMBER 31

* THE CURRENT DAYRATE LEVELS AND UTILISATION IN THE JACK-UP RIG MARKET REMAINS CHALLENGING

* THE COMPANY IS STILL IN THE MARKET FOR ATTRACTIVE ASSETS THAT COMPLEMENT THE CURRENT FLEET PROFILE, BOTH THROUGH ACQUISITIONS OF RIGS ON A STANDALONE BASIS AND/OR FROM POTENTIAL CORPORATE TRANSACTIONS

* SAYS IT ‍IS LIKELY THAT MOST OF PARAGON'S 21 UNCONTRACTED JACK-UP RIGS WILL NOT BE MARKETED FOR NEW DRILLING CONTRACTS​

* THERE ARE CLEAR SIGNS THAT WE HAVE PASSED THE BOTTOM OF THE OFFSHORE DRILLING CYCLE AND THE ACTIVITY LEVEL IS PICKING UP

* SAYS THE COMPANY WILL FOCUS ON OPERATING MODERN, HIGH-SPEC ASSETS​

* CHAIRMAN SAYS RIG OWNERS SHOULD TAKE STEPS TO RATIONALISE THEIR FLEETS AND CONSOLIDATE FRAGMENTED MARKET​ ‍AS ALMOST 50% OF GLOBAL RIG FLEET IS MORE THAN 30 YEARS OLD

* HISTORICALLY, A SIGNIFICANT INCREASE IN DAY RATES AND UTILISATION HAS LAGGED AN OIL PRICE RECOVERY WITH 12 – 24 MONTHS

* AS A RESULT, THE BOARD IS CAUTIOUS ABOUT PURSUING CONTRACT OPPORTUNITIES THAT ARE LONG DATED AT CURRENT DAY RATE LEVELS. AND THEREFORE, THE SHAREHOLDERS SHOULD EXPECT SIGNIFICANT UNCONTRACTED CAPACITY FOR 2018

* Source text for Eikon: Further company coverage: (Reporting By Ole Petter Skonnord)

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