Keppel divests six rigs to Apollo-backed fund for $1.2b

The group expects $611m in cash proceeds from the transaction.

Keppel will divest six operational legacy rigs to its newly established Keppel Offshore Fund (KOF) this year for about $1.2b.

In a statement, the company expects to receive cash proceeds of approximately $611m from the transaction.

The disposal will contribute about $1.2b to Keppel’s 2026 asset-monetisation programme and increase its funds under management by approximately $3.9b.

The group expects to recognise an accounting loss of about $92m from the deal in its first-half results, including the recycling of foreign-currency translation losses to profit or loss.

Funds, accounts and entities managed by Apollo, together with an indirect Keppel subsidiary, have agreed to subscribe for limited partnership interests in the private fund, which is managed by the group.

Apollo will provide cash for KOF’s acquisition of the six rigs, whilst Keppel will fund half of the required contributions through an in-kind transfer, subject to conditions being met.

The company also intends to complete and potentially divest four additional rigs to the fund between 2027 and 2028.

The rigs are at various stages of construction, with completion to be funded using cash retained in Rigco Holding Pte. Ltd. Their eventual disposal could generate aggregate cash proceeds of about $1.3b.

Keppel will earn advisory and recurring management fees as the fund’s investment manager, as well as a share of distributions from its stake in the fund.

The remaining three of its 13 legacy rigs are not included in the programme. The company said it is considering other monetisation options for them.