Keppel Corporation announced that its subsidiary Keppel Offshore & Marine (Keppel O&M), through its wholly-owned subsidiaries have entered into new bareboat charter contracts with ADES Saudi Limited Company for two KFELS B Class jackup rigs, Cantarell III and Cantarell IV (to be renamed ADM685 and ADM686 respectively).
The new bareboat charters will be for a period of five years, expected to commence in the first half of 2023, and projected to generate total revenue of about $155 million for Keppel O&M, which includes modification works to prepare the rigs for deployment. The entry into the new bareboat charters follows the termination of sale and leaseback arrangements in relation to the rigs between the group and subsidiaries of Grupo R, as announced on Feb 20, 2019 and Dec 13, 2019.
Subsequent to unremedied events of default under the Grupo R bareboat Charters arising from actions and omissions of the charterers, the group has exercised their contractual right to terminate the Grupo R bareboat charters. Keppel O&M will retain all payments received to date under the Grupo R bareboat charters and have retaken possession of the rigs from Grupo R.
The termination of the Grupo R bareboat charters and the entry into the New bareboat charters are not expected to have a material impact on the net tangible assets or earnings per share of Keppel Corporation for the current financial year.
Shares in Keppel Corp closed at $7.10 on Nov 10.