Keppel to terminate contracts on rigs after customers failed to pay

Keppel FELS has issued notices of termination for two contracts to build jackup rigs as the clients failed to take delivery or pay outstanding installments, Keppel Corp. said in a filing to SGX Wednesday. 

“The relevant contracts are being terminated as part of ongoing efforts to explore other options, such as the sale and charter of these rigs,” Keppel said. 

Keppel alleged there was no reasonable or legal justification to fail to take delivery or to fail to pay the outstanding amounts. 

“Following the termination of the relevant contracts, Keppel FELS will retain all payments received to date under the relevant contracts, and will retain ownership of the rigs, including the right to sell,” the filing said.

The company pointed to an October 2013 announcement of an order for two jackup rigs from a Clearwater Capital Partners affiliate, with one of the rigs, valued at around US$200 million remaining undelivered.

In addition, in 2014, the company entered a contract with Fecon International, to build three high-specification KFELS B Class jackup rigs, valued at around US$650 million, the filing noted. 

Keppel FELS is a wholly owned subsidiary of Keppel Offshore & Marine.

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