Borr Drilling Limited
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report Commission File Number: 001-39007 Borr Drilling Limited (Exact name of registrant as specified in its charter) Bermuda (Jurisdiction of incorporation or organization) S.E. Pearman Building 2nd Floor 9 Par-la-Ville Road Hamilton HM11 Bermuda +1 (441) 737-0152 (Address of principal executive offices) Georgina Sousa 2nd Floor 9 Par-la-Ville Road Hamilton HM11 Bermuda +1 (441) 737-0152 James A. McDonald Skadden, Arps, Slate, Meagher & Flom (UK) LLP 40 Bank Street, Canary Wharf London E14 5DS England +44(0)20 7519 7183 (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) Securities registered or to be registered pursuant to Section 12(b) of the Act: Title of Each Class Trading Symbol Name of Each Exchange on Which Registered Common shares of par value $0.05 per share BORR The New York Stock Exchange Securities registered or to be registered pursuant to Section 12(g) of the Act: None Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: As of December 31, 2019, there were 110,818,351 common shares outstanding. Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒ If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such a shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Emerging growth company ☒ If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards † provided pursuant to Section 13(a) of the Exchange Act. ☒ † The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐ Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: International Financial Reporting Standards as issued by the International U.S. GAAP ☒ Other ☐ Accounting Standards Board ☐ If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the Registrant has elected to follow: Item 17 ☐ Item 18 ☐ If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ (APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS) Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐ TABLE OF CONTENTS PART I 7 ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS 7 A. DIRECTORS AND SENIOR MANAGEMENT 7 B. ADVISERS 7 C. AUDITORS 7 ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 7 ITEM 3. KEY INFORMATION 8 A. SELECTED FINANCIAL DATA 8 B. CAPITALIZATION AND INDEBTEDNESS 10 C. REASONS FOR THE OFFER AND USE OF PROCEEDS 10 D. RISK FACTORS 10 ITEM 4. INFORMATION ON THE COMPANY 44 A. HISTORY AND DEVELOPMENT OF THE COMPANY 44 B. BUSINESS OVERVIEW 44 C. ORGANIZATIONAL STRUCTURE 61 D. PROPERTY, PLANTS AND EQUIPMENT 62 ITEM 4A. UNRESOLVED STAFF COMMENTS 62 ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 63 A. OPERATING RESULTS 73 B. LIQUIDITY AND CAPITAL RESOURCES 75 C. RESEARCH & DEVELOPMENT 82 D. TREND INFORMATION 82 E. OFF-BALANCE SHEET ARRANGEMENTS 83 F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS 83 G. SAFE HARBOR 83 ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 83 A. DIRECTORS AND SENIOR MANAGEMENT 83 B. COMPENSATION 86 C. BOARD PRACTICES 86 D. EMPLOYEES 88 E. SHARE OWNERSHIP 88 ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 90 A. MAJOR SHAREHOLDERS 90 B. RELATED PARTY TRANSACTIONS 90 C. INTERESTS OF EXPERTS AND COUNSEL 93 ITEM 8. FINANCIAL INFORMATION 94 A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION 94 B. SIGNIFICANT CHANGES 94 ITEM 9. THE OFFER AND LISTING 95 A. OFFER AND LISTING DETAILS. 95 B. PLAN OF DISTRIBUTION 95 C. MARKETS 95 D. SELLING SHAREHOLDERS 95 E. DILUTION. 95 F. EXPENSES OF THE ISSUE 95 ITEM 10. ADDITIONAL INFORMATION 96 A. SHARE CAPITAL 96 B. MEMORANDUM OF ASSOCIATION AND BYE-LAWS 96 C. MATERIAL CONTRACTS 100 D. EXCHANGE CONTROLS 100 E. TAXATION 101 F. DIVIDENDS AND PAYING AGENTS 104 G. STATEMENT BY EXPERTS 104 H. DOCUMENTS ON DISPLAY 104 I. SUBSIDIARY INFORMATION 105 ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 106 ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 107 A. DEBT SECURITIES 107 B. WARRANTS AND RIGHTS 107 C. OTHER SECURITIES 107 D. AMERICAN DEPOSITARY SHARES 107 1 PART II 108 ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES 108 ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS 108 ITEM 15. CONTROLS AND PROCEDURES 108 ITEM 16. [RESERVED] 109 ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT 109 ITEM 16B. CODE OF ETHICS 109 ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES 109 ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES 110 ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS 110 ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT 110 ITEM 16G. CORPORATE GOVERNANCE 111 ITEM 16H. MINE SAFETY DISCLOSURE 111 PART III 112 ITEM 17. FINANCIAL STATEMENTS 112 ITEM 18. FINANCIAL STATEMENTS 112 ITEM 19. EXHIBITS 112 2 Table of Contents NOTE ON THE PRESENTATION OF INFORMATION We have prepared this annual report using a number of conventions, which you should consider when reading the information contained herein. In this annual report, unless the context otherwise requires, (i) references to “Borr Drilling Limited,” “Borr Drilling,” the “Company,” the “Registrant,” “we,” “us,” “Group,” “our” and words of similar import refer to Borr Drilling Limited and its consolidated subsidiaries, (ii) references to our “Board” or “Board of Directors” refer to the board of directors of Borr Drilling Limited as constituted at any point in time and “Director” or “Directors” refers to a member or members of the Board, as applicable, (iii) references to “Borr Drilling Management UK” and “Borr Drilling Management Dubai” refer to our subsidiaries Borr Drilling Management (UK) Ltd and Borr Drilling Management DMCC, respectively, (iv) references to our “Memorandum,” each provision thereof a “Clause,” or the “Bye-Laws,” each provision thereof a “Bye-Law,” refer to the memorandum of association and the amended and restated bye-laws of Borr Drilling Limited, respectively, each as in effect from time to time, (v) references to “Magni” or “Magni Partners” refers to Magni Partners (Bermuda) Limited, (vi) references to “Taran” refer to Taran Holdings Limited, (vii) references to “Ubon” refer to Ubon Partners AS, (viii) references to “Drew” refer to Drew Holdings Limited, (ix) references to our “DNB Revolving Credit Facility” or “DNB RCF” refer to our historical revolving credit facility with DNB Bank ASA, (x) references to our “Guarantee Facility” refer to our historical guarantee facility with DNB Bank ASA, (xi) references to our “DC Revolving Credit Facility” or “DC RCF” refer to our historical revolving credit and guarantee facility with Danske Bank A/S and Citigroup Global Markets Limited, (xii) references to our “Bridge Facility” or “Bridge RCF” refer to our historical revolving credit facility with Danske Bank A/S and DNB Bank ASA, (xiii) references to our “Hayfin Facility” refer to our term loan facility with Hayfin Services LLP, among others, (xiv) references to our “Syndicated Facility” or “Syndicated RCF” refer to our senior secured credit facilities with DNB Bank ASA, Danske Bank, Citibank N.A., Jersey Branch, Clifford Capital Pte.