Keppel Offshore & Marine (Keppel O&M) has entered into an amended and restated framework deed with Borr Drilling on Oct 12.
Under the new framework deed, Keppel O&M says it will accelerate the delivery of three yet-to-be delivered jackup rigs to Borr Drilling between October 2022 and July 2023. There are five rigs that have not been delivered yet.
The five rigs form part of the identified assets that will be transferred to Rigco Holding as part of the agreements in connection with the proposed combination of Keppel O&M and Sembcorp Marine (SembMarine).
The seller’s credit arrangements for two of these three jackup rigs will be cancelled, and accordingly, all three jackup rigs will be delivered without any seller’s credit arrangement, reads the statement released by Keppel O&M.
At the same time, the overall total of the seller’s credit arrangements being made available by Keppel O&M as at June 5, 2020, by over 35%.
All three jackup rigs will be delivered with full payments (including holding costs and cost cover) on delivery. The payments amount to at least a total of US$352 million ($506.1 million) out of which US$158 million be payable in 2022.
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The new arrangements will become effective immediately.
The deliveries of the remaining two rigs will be deferred to 2025 in which Borr Drilling will pay holding costs and cost cover in respect of the deferred deliveries.
The rest of the transactions mentioned in the amended and restated framework deed will become effective once certain conditions are satisfied. The conditions include Borr Drilling obtaining consents of its other key creditors for, amongst others, the deferral of principal and interest payments in respect of certain debts owing to those creditors to 2025.
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The announcement comes two days after SembMarine announced that its wholly-owned subsidiary, PPL Shipyard (PPLS) has reached an in-principle agreement with Borr Drilling Limited.
In the Oct 10 statement, SembMarine announced that the in-principle agreement will see Borr Drilling deferring PPLS’s receivables from 2023 to 2025.
The deferment will result in Borr Drilling making earlier and higher amounts of interest payments and partial principal repayments to PPLS from 2022 to 2024.
Borr Drilling has also fulfilled the required conditions including the raising of certain amounts of equity and completion of refinancing of its other secured creditors.
Shares in Keppel Corporation closed 14 cents lower or 2.01% down at $6.81 on Oct 12.
