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.

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