The transaction is part of Keppel's plans to divest 10 oil rigs held by its indirect subsidiary, Rigco Holding Pte, for nearly S$3.7 billion ($2.87 billion), to free up funds for new investments, reduce debt and reward shareholders.
Keppel expects to receive $478 million in cash this year through the divestment of the six rigs to the new Keppel Offshore Fund for S$1.2 billion. The Singapore-based fund manager will make 50% of the contribution to the new private fund through an indirect unit.
Divestment of the six rigs is expected to add around S$3.9 billion to Keppel's funds under management, Keppel said.
Apollo Global Management will invest $1.5 billion in Singapore-based Keppel's new private fund that will hold six operational oil rigs, the two companies said on Monday.
The deal will help Keppel monetise its non-core assets and unlock capital for re-investment, while allowing Apollo to tap into the region’s offshore energy market, which is seeing high utilization rates and long-term demand trends.
The fund manager also intends to divest four additional rigs, currently under construction, to the new fund from 2027 to 2028. The transaction is expected to generate $988 million in cash proceeds for Keppel.
Keppel will book an accounting loss of from the divestment of the six operational rigs in its first-half results scheduled on July 30, it added.
($1 = 1.2907 Singapore dollars)
