Keppel O&M to accelerate delivery of three jackup rigs to Borr Drilling

KEPPEL Offshore & Marine (Keppel O&M) will speed up the delivery of three out of five undelivered jackup rigs to Borr Drilling and defer the delivery of the remaining two rigs, according to a bourse filing by Keppel Corp on Wednesday (Oct 12).

This comes as Keppel O&M entered into an amended and restated framework deed with Borr Drilling and its subsidiaries, to make the delivery to Borr Drilling or any third party whom Borr Drilling intends to sell the rigs to between October 2022 and July 2023.

All three jackup rigs will also be sold without any seller's credit arrangement, after two of the three jackup rigs' seller's credit arrangements are cancelled.

The company added that the three rigs will be delivered with full payments on delivery, including holding costs and cost cover. This will amount to at least US$352 million in aggregate, out of which at least US$158 million will be payable in 2022.

It noted that the overall aggregate of the different seller's credit arrangements being made available by Keppel O&M will be reduced by over 35 per cent, as the company had previously noted in an announcement on Jun 5, 2020.

In addition, delivery of the remaining two of the five undelivered jackup rigs to Borr Drilling will be deferred to 2025, Keppel said. Borr Drilling will pay the holding costs and cost cover for the deferred deliveries.

Keppel said entering the amended and restated framework deed is not expected to have a material impact on the net tangible assets or earnings per share of the company for the current financial year.

This comes after the company said on Jan 28, 2021 that the five jackup rigs' scheduled delivery would be deferred to 2023, with the first delivery to be made in May 2023 and the final one in December 2023.

Shares of Keppel fell 2 per cent or S$0.14 to close at S$6.81 on Wednesday, before the announcement.

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