SINGAPORE (May 16): Keppel Offshore & Marine’s (Keppel O&M) wholly-owned subsidiary, Keppel FELS, has signed a master agreement to sell five jackup rigs to Borr Drilling for a total value of US$745 million ($993 million).
These are existing jackup rigs which are currently being built by Keppel FELS to the KFELS B class designs.
The total price of the five rigs excludes any down payments made by the respective original owners.
Borr Drilling will pay a first instalment of US$288 million following the signing of the agreement. The remaining amounts are payable within five years from the respective delivery dates of each individual rig.
The rigs are scheduled to be delivered progressively from 4Q19 to 4Q20, with one rig to be delivered in 2019 and four rigs in 2020.
“The agreement with Borr Drilling demonstrates that rig owners continue to look for reliable, high quality rigs, such as the KFELS B Class, to maximise efficiency and productivity,” says Chris Ong, CEO of Keppel O&M.
“This is a win-win agreement for all parties and enables Keppel O&M to further improve our cashflow, minimise the holding risks of the projects, and clear several of the deferred orders,” he adds.
“We are pleased to be getting another five high quality jackup rigs from Keppel FELS on top of the five we acquired earlier,” says Svend Anton Maier, CEO of Borr Drilling. “This is an opportune time for us to grow our fleet of highly capable jackup rigs as the market is showing signs of recovery from the bottom of the business cycle.”
Keppel Corporation says the above transaction is not expected to have a material impact on its net tangible assets or earnings per share for the current financial year. It is not expected to result in any writedowns on the projects.
Shares of Keppel Corp closed 2 cents lower at $8.22 on Tuesday.
Source: The Edge