SINGAPORE (Dec 27): Sembcorp Marine's subsidiary Jurong Shipyard may have found a buyer for West Rigel, however one negative overhang looming large on the horizon is the Brazilian corruption probe.

See: Sembcorp Marine to dispose semi-submersible rig for $672 mil

So far, SembMarine has denied allegations linking it to illicit payments made to politicians in Brazil through contracts awarded by state-owned oil company Petrobras and Sete Brasil, which leases rigs to the former.

In a Wednesday report, Lim & Tan Securities says the sale of West Rigel to a buyer at US$500 million ($671 million) will remove all the problematic rigs built by SembMarine that were deferred due to the oil price crash in 2015.

Despite making a $24 million loss if the sale materialises, the deal will further strengthen the balance sheet and improve the liquidity position of the SembMarine when completed.

While it is premature to speculate on the outcome of the investigations known as Operation Car Wash, Lim & Tan believes Keppel Corp’s willingness to pay US$422 million ($567 million) fine to resolve its own charges firmly puts the spotlight on SembMarine in the near-term.

See: Keppel O&M fined US$422 mil as part of resolution over bribes for contracts by ex-agent Skornicki

See: Keppel bribery fine puts spotlight on peer Sembcorp, shares slide

"We are thus downgrading SembMarine to "hold" until further announcement by the company," says Lim & Tan.

Shares in SembMarine are trading at $1.87 or 1.55 times book value.