SINGAPORE (Dec 26): Sembcorp Marine announced Tuesday that wholly-owned subsidiary Jurong Shipyard has agreed to sell its semi-submersible rig, West Rigel, for US$500 million ($672 million).

West Rigel was originally contracted by North Atlantic Rigel (NARL), a subsidiary of North Atlantic Drilling (NADL) and Seadrill. Both Seadrill and NADL have applied for restructuring under Chapter 11 in the United States.

NARL and Jurong Shipyard had entered into a standstill agreement in December 2015, and have extended the agreement to July 2018.

During the standstill period, NARL was to market the rig for an acceptable drilling contract and Jurong Shipyard for the sale of the rig at an acceptable price.

In the event that no employment is secured and no alternative transaction is completed when the standstill period concludes, the parties were to form a joint asset holding company for joint ownership of the rig.

The proposed disposal of West Rigel will result in a loss of approximately $24 million. However, Sembmarine says in a statement on Tuesday that the transaction would improve the liquidity position of the company.

Shares of Sembcorp Marine last closed at $1.94 on Dec 22.