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Sembmarine sells nine jack-up rig newbuilds to Borr Drilling for $1.3bn

Sembcorp Marine (Sembmarine) is selling nine jack-up rig newbuilds, including six from cancelled contracts, to Borr Drilling for $1.3bn.

The nine Pacific Class 400 rigs are from Sembmarine's PPL Shipyard, and comprise six completed newbuilds from contracts that have been terminated and three rigs described as being under various stages of construction completion.

The rigs will be delivered to Borr Drilling between Q4 this year and Q1 2009, and the company is making a $500m upfront payment. The remaining $800m is deferred for up to five years from delivery dates of the respective rigs.

“Borr Drilling will pay interest at market rates from the respective delivery dates of the rigs to full payment of the balance amount. The balance amount and all interest payable will be secured by a first priority mortgage over the rigs and a corporate guarantee from Borr Drilling,” Sembmarine said.

Sembmarine will book a SGD15m loss on the sale of the nine rigs excluding the interest and market fee payable by Borr Drilling. It said the transaction would “significantly improve” its liquidity position.

Borr Drilling was founded by former John Fredriksen and Seadrill senior executives Tor Olav Troim and Fredrik Halvorsen, moving agressively in a down market and has already bought Transocean's fleet ot 15 jack-up rigs for $1.35bn.

“The acquisition will increase the Borr Drilling fleet to a total of 26 jack-up rigs once all rigs under construction have been delivered and 22 of the rigs are built after 2000,” the company said.

“The company continues to deliver on its strategy to acquire premium jack-up drilling rigs at attractive prices and consolidate ownership in the premium segment of the overall jack-up rig fleet.”

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