Keppel to assume control of Rigco Holding legacy rigs
Following a selective capital reduction (SCR) exercise to be completed by Rigco Holiding, Keppel Ltd will secure control over the 13 legacy rigs held by Rigco.
When the SCR is completed by the end of Q4 2024, the shares of Rigco not held by Keppel will be cancelled, resulting in Rigco becoming a wholly-owned subsidiary of Keppel. Rigco will be housed within a newly created private fund to be managed by Keppel. With control over Rigco, Keppel will be able to effectively manage when and how the legacy assets are monetized, with the goal of achieving the best risk-adjusted returns. Keppel will also have control of S$843 million of cash in Rigco as at end September 2024, which it can utilize to complete the unfinished rigs.
As the largest economic interest holder in Rigco, Keppel remains focused on the monetization of the legacy assets. As part of the existing master services agreement, Seatrium Limited will continue to provide construction, maintenance and other associated services for the legacy rigs for an initial period of 10 years after the combination of Keppel Offshore & Marine Ltd (now known as Seatrium Offshore & Marine Ltd) and Sembcorp Marine Ltd (now known as Seatrium Ltd).
Keppel plans to establish a new and dedicated private fund, the Keppel Offshore Infrastructure Fund, to own and manage the legacy rigs and its 49% stake in Floatel as well as attract third-party capital from limited partners and co-investors. This will provide Keppel with greater strategic flexibility to respond to market opportunities via directly managing the rig assets through the Fund, while potentially earning asset management fees as a General Partner of the Fund. The Fund would also have the option of selling the rigs or exiting through a securitization route.
