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Keppel contracts in doubt

Article-Keppel contracts in doubt

Keppel contracts in doubt

Singapore: Keppel Offshore & Marine Limited (Keppel O&M) says that it has received indications from Seadrill Limited, Scorpion Offshore Ltd, and Lewek Shipping Pte Ltd that they are reviewing their options on their newbuilding contracts that were signed in the middle of this year.

The contracts under review, on which Keppel O&M holds down payments, are for a semisubmersible for Scorpion Offshore, two jackup rigs for Seadrill and a Multi-Functional Support Vessel for Lewek Shipping. Construction work has not started on these projects and Keppel O&M is in talks with its clients to arrive at mutually acceptable arrangements for these contracts.
If these contracts are cancelled, the cancellations are not expected to have any material impact on the net tangible assets or earnings per share of Keppel Corporation for the financial year ending 31 December 2008.
Keppel O&M has a strong orderbook of about $12.5bn extending through to 2012 and its contracts are cashflow positive.  [27/11/08]

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