Singapore-based Keppel has set up a new private fund to which it will divest ten legacy rigs, as part of its announced monetization, with Apollo Global Management to invest $1.5 billion in the fund.
Through its indirect subsidiary, Rigco Holding (RigCo), Keppel will divest six operational rigs this year to the Keppel Offshore Fund (KOF) for a total of approximately S$1.2 billion (US$936 million) and is expected to receive a cash consideration of about US$478 million.
KOF’s acquisition of the rigs will be by cash from Apollo, while Keppel will make 50% of the contributions to the fund to acquire six operational rigs, which will be satisfied by way of contribution in kind, subject to certain conditions.
Keppel intends to progressively complete and may divest an additional four rigs, in different stages of completion, to KOF from 2027 to 2028, subject to certain conditions. This could generate, in aggregate, approximately US$988 million in cash proceeds for Keppel. The construction of the four legacy rigs would be funded using existing cash retained in RigCo.
The divestment of the six operational rigs will contribute approximately S$1.2 billion towards Keppel’s announced asset monetization for 2026, while increasing its funds under management (FUM) by approximately S$3.9 billion. Subject to closing conditions, Keppel will earn, among others, certain advisory fees and recurring management fees as the investment manager of the fund, as well as a share of distributions from its stake in KOF.
“This transaction marks a further milestone in Keppel’s transformation. It establishes a clear pathway for the progressive monetisation of the legacy rigs. By repositioning the six operational rigs and potentially another four rigs, within Keppel’s fund management platform, we are expanding our FUM and will earn recurring management fees,” said Loh Chin Hua , CEO of Keppel.
“At the same time, through our stake in KOF, we will remain invested alongside our Limited Partner, Apollo, in a high-quality modern rig fleet, positioning us to benefit from the improving long-term outlook and tight supply in the rig market.”
The final three of the 13 legacy rigs are not part of this transaction, and Keppel will explore different options for their monetization.
Completion of the transaction is subject to various conditions, including consent of relevant parties and the applicable regulatory approvals.