Singapore’s Keppel Offshore & Marine is to accelerate the delivery of three newbuild jack-up rigs it is building for Borr Drilling, while it will defer two other units.
Keppel O&M and Borr have entered into an amended and restated framework deed, whereby the rig builder will receive more cash payments earlier and reduce its overall financial exposure to Bermuda-headquartered Borr.
The Singapore contractor on Thursday confirmed it would receive at least US$352 million this year and next — amounting to full payment for the three rigs that now have accelerated deliveries between this month and July 2023, out of which at least US$158 million will be payable in 2022.
The three units on the revised speedier timeline can be delivered to Borr or a third party that intends to sell the jack-ups.
The amended deed also sees the seller’s credit arrangements for two of these rigs being cancelled, meaning the trio will be delivered without any seller’s credit arrangement.
However, delivery of the two remaining jack-ups will be deferred to 2025, although Borr will pay holding costs and cost cover for these deferred rig deliveries.
The rig builder and client had earlier agreed to defer the delivery of all five rigs until 2023.
Some of the transactions contemplated in the amended and restated framework deed will only become effective upon the satisfaction of certain conditions.
This includes Borr Drilling obtaining consents of its other key creditors for, amongst others, the deferral of principal and interest payments in respect of certain debts owing to those creditors to 2025.
The five jack-ups form part of the identified Asset Co assets — the legacy rigs — that Keppel O&M intends to transfer to Rigco Holding, a separate minority-owned Singapore company that will either sell them or secure charter agreements.
Earlier this week, compatriot Sembcorp Marine entered into a discrete deal with Borr Drilling whereby the rig contractor agreed to accelerate an outstanding payment totalling hundreds of millions of dollars for newbuild rigs constructed at Sembmarine’s wholly owned subsidiary PPL Shipyard in Singapore.