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Keppel O&M delivers jackup rig under sale-and-leaseback deal

The Business Times by RACHEL MUI


KEPPEL Offshore & Marine (Keppel O&M) has delivered a jackup rig to Mexican driller Grupo R under a sale-and-leaseback agreement, the group said on Wednesday.

As part of the deal, Grupo R has entered into an agreement with FELS Asset Co, a wholly-owned subsidiary of Keppel O&M.

FELS Asset will purchase the rig, Cantarell IV, from Grupo R for US$179 million, or the equivalent of the balance contract value of the rig.

Cantarell IV will then be leased back to Grupo R on a bareboat charter at competitive day-rates over five years, Keppel said. Grupo R's parent company, IPC, will provide a guarantee on Grupo R's payment obligations.

Under the bareboat charter, Grupo R has the right to purchase the rig at a pre-determined price; after the five-year mark, FELS Asset also has the option to require Grupo R to purchase the rig at a pre-agreed price.

The rig will be deployed to work in offshore Mexico, under an integrated drilling contract for offshore wells secured by IPC with Mexican state-owned oil group Pemex. This is slated to commence in early May, Keppel said.

Separately, Keppel also noted that this is the first rig equipped with its proprietary RigCare digital solutions, which will "significantly transform the efficiency, safety and operability of the rig".

The deal is not expected to have any material impact on Keppel's net tangible assets, or earnings per share for the financial year ending Dec 31, 2019, the group said.

Shares in Keppel Corp closed up by S$0.20, or 3.27 per cent, at S$6.32.