Key facts
- Apollo Global Management will invest $1.5 billion in Keppel's new private fund.
- The fund will hold six operational oil rigs.
- Keppel plans to divest a total of 10 oil rigs for approximately S$3.7 billion.
- Keppel expects to receive $478 million in cash this year from the sale of six rigs.
- The transaction is expected to add S$3.9 billion to Keppel's funds under management.
Apollo Global Management has agreed to invest $1.5 billion in a new private fund established by Singapore-based Keppel, which will house six operational oil rigs. The companies announced the deal on Monday, stating it would help Keppel monetize its non-core assets and reinvest capital, while providing Apollo access to the growing offshore energy market in the region.
This transaction is part of Keppel's broader strategy to divest 10 oil rigs held by its subsidiary, Rigco Holding Pte, for nearly S$3.7 billion ($2.87 billion). The divestment aims to free up funds for new investments, reduce debt, and reward shareholders.
Keppel anticipates receiving $478 million in cash this year from the sale of the six operational rigs to the Keppel Offshore Fund for S$1.2 billion. Keppel will also book an accounting loss of S$92 million related to this divestment in its first-half results. The fund manager expects the divestment to increase its funds under management by approximately S$3.9 billion.
Additionally, Keppel plans to divest four more rigs currently under construction to the new fund between 2027 and 2028, a transaction projected to generate $988 million in cash proceeds.