Keppel reaches settlement on Parden rig contract

KEPPEL Corporation said after Friday trading hours, its rig-building arm, Keppel Fels has entered into a settlement agreement towards the construction of a jack-up rig that was intended for delivery to Uruguay-based Parden Holding SRL.

The agreement provides for the resale of the rig to the associate of a guarantor to Parden's obligations under the rig-building contract but on a two-year deferment to the rig delivery.

In August 2013, Keppel Corp announced the award of a contract valued at US$206 million to build a KFELS B Class jack-up rig for Parden. The rig was then scheduled for delivery in the fourth quarter of 2015.

Keppel said that following Parden's failure to take delivery of the jack-up rig and make payment for the balance 80 per cent of the contract value, Keppel Fels has entered into a settlement agreement with Parden's guarantor for the contract.

A sale contract will be concurrently executed with 361 Projects Pte Ltd, an associate of the guarantor, for the entity to purchase the jack-up rig at a price equivalent to the balance contract value previously agreed with Parden.

A replacement guarantee will be issued by the guarantor to secure the obligations of 361 Projects under the sale contract.

Delivery of the rig will be pushed back to the fourth quarter of 2017.