Borr Drilling, run by former John Fredriksen right hand man Tor Olav Triom, is purchasing all outstanding shares in Paragon for $232.5m. Borr has received commitments from 67.9% of Paragon's shareholders and is tendering for all the outstanding shares.
“We believe this is an excellent outcome for Paragon’s stakeholders. Although Paragon is well positioned to manage through the cycles of the intensely competitive offshore drilling industry, this opportunity minimizes the risk of the investment outcome for our stakeholders at an attractive price,” said Jay Swent, Paragon’s president & ceo of Paragon.
Paragon has a fleet of 32 drilling rigs two modern units of the leading JU-2000E design currently in the North Sea and five of older jack-ups currently working in the North Sea, India and Middle-East, with four additional jack-ups under contract or committed, The company also has a semi-submersible under long term contract. Paragon has 21 older jack-up rigs stacked in various locations.
Borr chairman Triom indicated that many of the of older jack-up rigs could be scrapped. “ Based on the anticipated high reactivation cost, safety standards and drilling efficiency it is likely that most of these units will not be marketed for new drilling contracts,” he said.
“As almost 50% of the global rig fleet is more than 30 years old, responsible owners should take steps to rationalise their fleets and consolidate the fragmented market. Borr wants to be at the forefront of this initiative. Borr will, as communicated, focus on operating modern, high-spec assets,” Triom explained.
Following the acquisition Borr will own 24 premium jack-up rigs built since 2000.
Borr made its first foray into the rig market purchasing two jack-up rigs in December 2016. Since then it has moved agressively to acquire modern distressed assets and has bought 24 additional rigs. It currently has an operational fleet of 13 rigs and 13 newbuildings on order at Keppel FELS and PPL Shipyard in Singapore for delivery from Q1 this year through to Q4 2020.
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