Borr Drilling to Divest Stake in Mexican Joint Venture Perfomex

Borr Drilling is getting out of the joint-venture business in Mexico, at least on paper. The Bermuda-incorporated drilling contractor entered into definitive agreements to divest its 51% equity interest in Perforaciones Estratégicas e Integrales Mexicana S.A. de C.V. and its sister entity, together known as Perfomex, selling that stake to its long-standing local partner. The deal is expected to close in September 2026.

Once the transaction closes, the local partner becomes sole owner of Perfomex and takes over day-to-day management of three jack-up rigs — Galar, Gersemi and Njord — all currently working under contract with PEMEX, Mexico’s state oil company. Borr isn’t walking away from the rigs themselves. The company will retain ownership and keep participating in the underlying PEMEX contracts through bareboat charter agreements, arrangements it says are expected to be largely unchanged from the existing economics.

Why Borr Is Untangling a Structure It Just Expanded

The timing is a little counterintuitive. Borr just grew its Mexican footprint, not shrank it. The divestment follows the company’s recent acquisition of five premium jack-up rigs, which it jointly owns through BC Ventures Limited, a 50/50 joint venture with the same local partner now taking full control of Perfomex, according to the company’s announcement. So Borr is simultaneously exiting one Mexican structure and building another, larger one alongside the same partner.

Borr frames it as simplification, not retreat. Once the sale closes, Perfomex continues its integrated well-services work for PEMEX under the partner’s sole ownership, while Borr operates and markets its own fleet to other operators in the region through affiliated companies, the company said. Borr says the streamlined structure strengthens its local partnership and creates a more efficient platform for growth as demand develops in Mexico’s shallow-water market.

The sale price wasn’t disclosed as a dollar figure. Instead, the consideration is based on the estimated net book value of Borr’s equity interest in Perfomex as of July 31, 2026, according to the announcement. A post-closing transition period is meant to hand operational responsibilities to the local partner in orderly fashion, subject to customary closing conditions.

The Rigs and the Contracts That Don’t Change

Contract coverage on the three retained rigs is long-dated. Njord is under contract through April 2028, with extension options after that. Galar and Gersemi run through May 2030. Those horizons give Borr multi-year revenue visibility even as it hands off operational control, and TradingView’s analysis of the filing noted the sale price pegged to net book value limits the P&L impact from any gain or loss on the transaction.

• Njord — contracted through April 2028, extension options available
• Galar and Gersemi — contracted through May 2030, both tied to PEMEX
• Sale consideration based on net book value as of July 31, 2026
• Transaction expected to close September 2026

A Second Quarter That Explains the Urge to Simplify

The Mexico restructuring lands three weeks after Borr posted a rough second quarter. The company reported total operating revenues of $232.3 million for the three months ended June 30, 2026, down $14.7 million, or 6%, from the first quarter, according to results Borr announced August 11, 2026. Net loss came in at $241.4 million, a sharp reversal from the $29.0 million loss posted in the first quarter. The company attributed most of the swing to a $176.3 million debt extinguishment charge tied to refinancing its senior secured notes due 2028 and 2030 and convertible bonds due 2028.

Adjusted EBITDA fell to $43.8 million, down $44.7 million, or 51%, from the first quarter.

Revenue for the period was $232.3 million, as the average number of rigs operating declined from 22.4 in Q1 to 21.2 in Q2. Second Quarter Adjusted EBITDA was $43.8 million, a decline of $44.7 million compared with Q1. The sequential decrease was primarily driven by four factors. First, we incurred additional preparation work and regulatory approval activities for the Odin ahead of its contract in the U.S., with $22.5 million of operating expenses during the quarter, a $11.1 million quarter-on-quarter increase.

Bruno Morand, Chief Executive Officer, Borr Drilling

Morand also pointed to six rigs transitioning between contracts during the quarter, higher insurance and fuel costs tied to the conflict in the Middle East, and $10.8 million in credit losses linked to a former customer in West Africa — an increase of $4.8 million from the prior quarter. Following that provision, Borr says it carries no net receivables from that customer.

We are disappointed with the delays for the Odin, and the initial start-up requirements were greater than we would typically expect when entering a new market. This resulted in higher cost and delays in revenue.

Bruno Morand, Chief Executive Officer, Borr Drilling

Balance Sheet Moves Alongside the Mexico Deal

Borr didn’t just restructure Mexico. During the second quarter it refinanced substantially all existing debt, issuing senior secured notes due 2032 and 2034 and convertible notes due 2033 to push out maturities and cut financing costs, the company said. It also amended its super senior revolving credit facility, lifting commitments to $250.0 million while reducing the margin and extending the maturity date.

Subsequent to quarter end, Borr’s 50/50 joint venture with its Mexican partner completed the purchase of five premium jack-up rigs from Fontis for a total purchase price of $287 million, the company said — the same partnership structure now absorbing full ownership of Perfomex. Year-to-date 2026, Borr has been awarded 21 contract commitments representing roughly 4,350 days and $541 million of Dayrate Equivalent Backlog, according to the August announcement.

What’s Left Unsettled

Borr’s own announcement caveats the deal as subject to customary closing conditions, and none of the source material discloses a dollar figure for the sale consideration beyond the net-book-value formula tied to the July 31, 2026 valuation date. TradingView’s analysis flagged that a confirmed closing, disclosure of charter rates or cash proceeds, and any new contracts tied to added rigs would be needed to turn the restructuring into a bigger catalyst for the stock. Until the September close, the three PEMEX-contracted rigs remain under the current joint-venture arrangement, with Galar and Gersemi’s contracts running through May 2030 as the longest fixed points on Borr’s Mexican horizon.