SINGAPORE (June 5): Keppel Offshore & Marine (Keppel O&M) has entered into a framework deed with Borr Drilling on Friday.
The agreement was signed by Keppel O&M’s wholly-owned subsidiaries Keppel FELS and Offshore Partners.
Under the agreement, Keppel O&M will defer the scheduled delivery of five jackup rigs to Borr Drilling to 2022. The rigs will be delivered progressively. Borr Drilling will cover the holding costs for all the deferred deliveries.
These five jackup rigs are part of the 11 jackup rigs ordered by Borr Drillling, six of which have been delivered to date. Of the six delivered rigs, three have been paid in full.
Three of the delivered rigs will remain partially financed by Keppel O&M through a seller’s credit arrangement of approximately US$272.7 million (S$381.6 million) in total. Four of the five rigs due in 2022 will also be partly financed by Keppel O&M through a seller’s credit arrangement, which amounts to some US$415.3 million in total. Keppel O&M has a first lien in respect of these credit arrangements.
Based on the original delivery schedule, three out of the five rigs were scheduled for delivery by 3Q2020 and the remaining two rigs by 1Q2022.
Since May 20, Borr Drilling has entered into discussions with its lenders and shipyards to postpone yard commitments, adjust covenants and reduce amortisation as well as defer cash interest payment to strengthen its liquidity situation.
As at 1.07pm, Keppel Corporation shares were changing hands 0.2% down, at $6.26.
