October 7, 2019 / 1:24 AM / 14 days ago

Keppel settles with embattled Brazilian firm over long-running rig deal

SINGAPORE, Oct 7 (Reuters) - Singapore conglomerate Keppel Corp said on Monday it reached an agreement with indebted Brazilian firm Sete Brasil over a long-standing contract for six drilling rigs.

Keppel has previously said it has made provisions for around $200 million as part of the Sete contracts and stopped work on building the rigs in late 2015.

In late 2017, Keppel’s rig-building unit paid $422 million to resolve charges it paid bribes to win deals in Brasil, including to Sete.

As part of the settlement, Keppel said its subsidiary Fernvale will take ownership of four uncompleted rigs - with no penalties or other amounts due to any party.

As for the other two rigs, named Urca and Frade, $260 million will be recognised as part of Sete’s debts under its court-approved restructuring, and Keppel and Sete’s other creditors will be compensated from that, the firm said.

Sete’s creditors last week agreed to sell Urca, Frade and two other rigs to British firm Magni Partners, sources told Reuters.

Fernvale is in talks with Magni Partners on the terms to complete the construction of those rigs, Keppel said. ($1 = 1.3796 Singapore dollars) (Reporting by John Geddie and Aradhana Aravindan; Editing by Dan Grebler)

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