Bankruptcy filing being mulled for top client of Keppel and SembMarine

Singapore

AS investors of Sete Brasil - the largest single client at present for deep-water rigs being built at Sembcorp Marine (SembMarine) and Keppel Offshore & Marine (Keppel O&M) - meet to decide if the charter company of rigs should file for bankruptcy protection, a broker report suggested that the current woes mean only three out of six rigs for Keppel, and three out of seven rigs for SembMarine, will be built.

OCBC Investment Research also warned that if, at worst case, there is a complete cancellation of all the Sete rigs on order, there could be impairments for the rigs that Keppel and SembMarine are building for Sete, should they be marketed for sale to others subsequently as the rigs are unlikely to fetch the original contracted price of about US$800 million each.