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Keppel, Titan terminate management services agreement for Quanzhou shipyard
KEPPEL Corporation and Hong Kong's Titan Petrochemicals Group have terminated a management services agreement for a shipyard in the Chinese province of Fujian.
The termination - which took into account "the current market conditions and operational requirements of the partners" - is with immediate effect, Keppel said on Tuesday.
The agreement between Titan Quanzhou Shipyard and FELS Offshore - a wholly owned subsidiary, through Keppel Offshore & Marine - was announced in 2014 and took effect in mid-2016.
But "as a result of the downturn in the offshore and marine business", Titan held back on its investment in the shipyard and the Keppel unit has not actually started providing the management services under the agreement.
"Both Keppel and Titan have agreed to explore potential future collaboration as and when market conditions improve," Keppel said in its announcement.
It added that the termination "will not have any material impact" on its net tangible assets and earnings per share for the year to Dec 31.
Keppel closed down by S$0.07, or 0.9 per cent, to S$7.73, before the announcement.