Borr Drilling Limited - Update on Share Repurchase Program

Rhea-AI Summary

Borr Drilling (NYSE: BORR) has initiated the Second Tranche of its share repurchase program, partnering with DNB Markets to purchase the remaining $10 million worth of shares by December 31, 2024. This follows the completion of the First Tranche ($10 million) announced on November 20, 2024, under the previously authorized $20 million commitment.

The Second Tranche purchases will begin on December 13, 2024, with a cap of 4 million shares and a maximum price of $5.00 per share. The program aims to reduce share capital and benefit shareholders. DNB will execute trades independently, following Market Abuse Regulation guidelines, though Borr reserves the right to suspend purchases without notice.

Positive

• Commitment to return $20 million to shareholders through share repurchases
• Successful completion of first $10 million share repurchase tranche
• Clear price ceiling of $5.00 per share protects against overpayment
• Share capital reduction potentially increases value for remaining shareholders

Negative

• program size of $10 million for Second Tranche may have minimal market impact
• Short execution window (December 13-31, 2024) could affect price efficiency

Insights

Financial Analyst

The announcement of the second $10 million share repurchase tranche demonstrates Borr Drilling's commitment to returning value to shareholders. With a market cap of $927.7 million, this represents approximately 1.1% of the company's market value. The program's price ceiling of $5.00 per share suggests management believes the stock is undervalued at current levels.

The structured approach through DNB Markets and compliance with MAR regulations provides transparency and market stability. The cap of 4 million shares indicates a minimum expected purchase price of $2.50 per share. This strategic capital allocation decision signals management's confidence in the company's financial position and operational outlook, while maintaining flexibility with the option to suspend purchases.

Market Research Analyst

The execution of the second tranche, following the successful completion of the first $10 million buyback, demonstrates strong follow-through on management's capital return commitments. The timing of completion by year-end 2024 could create near-term buying pressure on the stock. The program's structure through DNB Markets ensures market integrity and reduces manipulation risks.

The broader $100 million authorization framework provides additional upside potential for future buybacks. This systematic approach to capital returns could help establish a floor price for the stock while potentially improving trading liquidity and shareholder confidence in the company's financial stewardship.

HAMILTON, Bermuda, Dec. 12, 2024 /PRNewswire/ -- Borr Drilling Limited ("Borr Drilling" or the "Company") (NYSE: BORR) (OSE: BORR) refers to i) its announcement on 6 November 2024, where the Company announced the authorization by its Board of Directors of a commitment to repurchase $20 million worth of shares within year end 2024, under its previously announced $100 million share repurchase authorization, and ii) the announcement on November 20, 2024, where the Company announced the completion of the first $10 million repurchases under the $20 million authorization (the "First Tranche").

The Company has entered a new agreement with DNB Markets ("DNB") to effect the purchase of the remaining $10 million worth of shares under the $20 million authorization in open market transactions on OSE and NYSE by December 31, 2024 (the "Second Tranche").

The purchases under the Second Tranche will commence on December 13, 2024, and will be completed by December 31, 2024, provided, however, that the Company may discontinue or suspend the repurchases at any time without notice.

The intention of the repurchase program is to service its shareholders by way of reducing the share capital. Aggregate repurchases under the Second Tranche are capped at $10 million and 4 million shares, and the maximum amount payable per share is USD 5.00. The Company cannot predict how many shares that will be repurchased or the timing of any purchases under the Second Tranche.

DNB will carry out the Company's instructions on the acquisition of shares, and will make its trading decisions independently of, and uninfluenced by, the Company. The Second Tranche of the repurchase program will be completed in accordance with the Market Abuse Regulation (EU) No 596/2014 ("MAR") and Commission Delegated Regulation (EU) 2016/1052 ("Safe Harbour Regulation").

This information is subject of the disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act and Article 5 of the Market Abuse Regulation.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this press release, are forward-looking statements, including statements regarding the repurchase program announced in this release, the Second Tranche, the timing and amount of repurchases of the shares that may be made under the repurchase program including the Second Tranche and other non-historical statements. Such forward looking statements are based upon management's current plans, expectations, assumptions and beliefs and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including risks related to the actual amount of shares ultimately repurchased under the share repurchase program including the Second Tranche and the prices and timing thereof, risks relating to available liquidity, limits under debt instruments and other limits on our ability to repurchase shares and other risks and uncertainties described in the section entitled "Risk Factors" in our most recent annual report on Form 20-F filed with (and other filings with) the Securities and Exchange Commission.  These forward-looking statements are made only as of the date of this release. We do not undertake to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

CONTACT: 

Questions should be directed to: Magnus Vaaler, CFO, +44 1224 289208

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SOURCE Borr Drilling Limited

FAQ

What is the total value of Borr Drilling's (BORR) current share repurchase program?

Borr Drilling has authorized a total of $100 million for share repurchases, with a current commitment to repurchase $20 million worth of shares by the end of 2024.

How much has BORR already spent on share buybacks in the First Tranche?

Borr Drilling completed the First Tranche of $10 million in share repurchases, announced on November 20, 2024.

What is the maximum price BORR will pay per share in the Second Tranche?

The maximum price per share that Borr Drilling will pay during the Second Tranche is $5.00.

When will BORR's Second Tranche of share repurchases begin and end?

The Second Tranche will commence on December 13, 2024, and must be completed by December 31, 2024.

How many shares can BORR repurchase in the Second Tranche?

The Second Tranche is capped at 4 million shares and $10 million in total value.