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 utilisation rates and long-term demand trends.
The transaction is part of Keppel's plans to divest 10 oil rigs held by its indirect subsidiary, Rigco Holding, for nearly SG$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 SG$1.2 billion.
The Singapore-based fund manager will make 50 per cent of the contribution to the new private fund through an indirect unit. Divestment of the six rigs is expected to add around SG$3.9 billion to Keppel's funds under management, Keppel said.
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 SG$92 million from the divestment of the six operational rigs in its first-half results scheduled on July 30, it added.
(Reporting by Sherin Sunny in Bengaluru; Editing by Leroy Leo)
