Keppel in talks with Borr Drilling for rig sales

Keppel Corporation Limited confirmed a newspaper report on 19 January that discussions are ongoing with Borr Drilling Limited (Borr Drilling) for the possible sale of jack-up rigs that are being built by Keppel FELS Limited (Keppel FELS).

Keppel said in an announcement, “The details and terms of any agreement relating to such sale and purchase have not yet been finalized and are still subject to ongoing negotiations and discussions, and no definitive agreement has been entered into by the relevant parties yet.”

Keppel also said there is no agreement involving the company on any potential sale-and-leaseback financing agreement with Grupo R. for jack-up rigs.

OCBC Investment Research analyst Low Pei Han said if the deal is successful, this is positive on Keppel’s cash flows and will improve its balance sheet.

Borr Drilling previously bought Sembcorp Marine’s nine rigs in October last year. Moreover, it bought nine Pacific Class 400 jack-up drilling rigs for US$1.3b plus a market-based fee calculated based on an uplift in value of the rigs sold.
Source: Singapore Business Review