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Sun, Dec 06, 2020 – 5:55 pm
GLOBAL’s offshore group, Keppel FELS, terminated a $ 425 million contract from Awilco Drilling to build a midwater drilling rig, motherboard-listed parent Keppel said in a stock presentation on Friday. at night.
Keppel FELS has assessed that the Awilco Drilling unit with which it signed the contract will not be able to make its second installment payment which expires in March 2021. The parties had signed the contract in March 2019.
This marks the second instance of termination of a contract between Keppel FELS and Awilco. The first contract, announced in 2018, was also worth $ 425 million and involved the construction of a midwater drilling platform. This contract was canceled in June.
In Friday’s filing, Keppel FELS said it issued a second contract termination notice to Awilco and began arbitration to enforce its rights against Awilco. It also seeks to retain the US $ 43 million already paid by Awilco to date, along with reimbursement of the Keppel FELS project costs until completion.
At the time of the announcement, Keppel FELS does not expect any reversal of the revenue recognized with respect to the contract, and no further impairment is expected beyond the assumptions in its latest financial statements for the six months ended June.
Keppel’s shares closed at S $ 5.26 on Friday.
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