Apollo has agreed to invest $1.5 billion in the Keppel Offshore Fund, a new Keppel-managed vehicle established to hold up to 10 legacy offshore drilling rigs.
The fund will initially acquire six operational rigs from Rigco Holding, a Keppel subsidiary, for approximately S$1.2 billion ($957 million). The first transaction is scheduled to close this year, subject to regulatory approvals and customary closing conditions.
Keppel expects to receive about $478 million in cash from the initial transfer. Apollo will provide the cash portion of the acquisition, while Keppel will contribute its 50% interest in the fund in kind.
Keppel will continue to manage the assets and receive advisory and recurring management fees. The transfer of the first six rigs is expected to add around S$3.9 billion to the group’s funds under management, which stood at S$95 billion at the end of 2025.
The company expects to record an estimated S$92 million accounting loss from the initial rig sale in its first-half results.
Four additional rigs are at various stages of construction and could be completed and transferred to the fund between 2027 and 2028. Their sale could provide Keppel with a further $988 million in cash.
The agreement does not cover the remaining three units in Rigco Holding’s 13-rig portfolio.
Keppel took full control of Rigco Holding and its legacy fleet in late 2024 as part of its plan to accelerate the disposal of assets retained from its former offshore and marine business. It also gained control of S$843 million held by Rigco Holding to finance the completion and monetisation of unfinished rigs.
The fleet was separated from Keppel Offshore & Marine before its merger with Sembcorp Marine to create Seatrium.
Keppel has stated that it does not intend to resume rigbuilding. Its plan is to convert the legacy fleet into cash and assets that generate recurring management fees.
