Keppel Corporation will gain full control over the 13 legacy rigs being held in the portfolio of Rigco Holding once this selective capital reduction exercise is completed successfully by the end of 2024. This is part of Keppel’s bigger play on enhancing and expanding its offshore and marine business portfolios.
In the transaction, Keppel will expand its holding in Rigco Holding, or Asset Co, to 100%, as all non-Keppel shares are canceled under the SCR process. Prior to the SCR, Keppel already held a 10% equity stake in Asset Co, along with $139 million in perpetual securities and $4.3 billion in vendor notes issued by the company.
Upon completion of the SCR, Asset Co will become a wholly-owned subsidiary of Keppel and will be placed under a newly established private fund managed by Keppel. This new structure provides Keppel with greater flexibility in managing and monetizing the legacy assets of Rigco Holding, while pursuing optimal risk-adjusted returns.
In addition to gaining control of the 13 rigs, Keppel will also manage approximately $843 million in cash held by Asset Co as of September 2024. These funds will be channeled to support the completion of unfinished rigs to further enhance Keppel’s offshore asset base and increase its capacity in the global rig market.
Such strategic oversight of these legacy assets would be consistent with Keppel’s stated goals of building on its position in the offshore market-especially in such fields as rig building, maintenance, and related services. The deal would add considerable operational synergies and solidify Keppel’s position as a market leader in the offshore and marine world.
This is part of Keppel’s efforts to optimize its portfolio and focus on high-growth areas such as renewables, sustainable infrastructure, and smart cities. The SCR exercise and acquisition of assets from Rigco Holding form the latest in Keppel’s drive to optimize its asset management strategies and unlock value from its vast portfolio of offshore and marine assets. The agreement would probably close by the end of 2024, pending regulatory approvals and completing the SCR process.
