Keppel Corporation has terminated a US$500 million contract given by TS Offshore to build a jack up rig, the TS Jasper, as the client has not paid the outstanding amounts due.
Another unit, Keppel FELS, cancelled a US$85 million contract to build a liftboat for Crystal Heights, for a similar reason.
Keppel also spiked a 2015 contract for a semi, Sapura Raiqa, given how the client “no longer intends to perform” its remaining contractual obligations.
According to Keppel, with the termination of the contracts, it will retain all payments already received even as it retains ownership of the vessels built.
The company maintains its right to sell the vessels.
As announced on April 27, the TS Jasper Vessel and the Sapura Raiqa Vessel are two of the assets to be transferred to a joint venture company with Sembcorp Marine, upon the completion of the proposed merger of the two entities.
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Keppel does not expect to have any material financial impact on the earnings and book value this year.
Keppel Corp shares closed Aug 5 at $7.05, up 0.28% for the day.
