Borr Drilling repayment to Sembcorp Marine might raise share price

It will repay partially $1.1b (US$0.8b) from 2023 to 2025.

Share price for Sembcorp Marine will slightly move up as Borr Drilling will partly repay the $1.1b (US$0.8b) it owed from the shipping and marine firm, the capital markets firm, CGS-CIMB, said.

CGS-CIMB was referring to the Sembcorp Marine’s recent announcement that it will reduce the repayment terms from Borr Drilling by a year to 2023 to 2024 from 2023 to 2025. It stemmed from the nine jack up rigs that Sembcorp Marine delivered to Borr Drilling in 2017 to 2019.

The new terms also include higher interest payments on the back of improvement in the improved oil drilling segment.

“We expect a potential slight positive movement in share price from this news,” read the CGS-CIMB brokerage report.

In a separate statement filed on 18 August, Sembcorp Marine said they are expected to execute the final documentation with Borr Drilling soon. 

Borr Drilling is also expected to complete the required conditions including the increasing of certain amounts of equity and completion of refinancing its other secured creditors, Sembcorp Marine also said.