Meanwhile, KepFels' client appears to have averted crisis
By VINCENT WEE
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SEMBCORP Marine unit Jurong Shipyard has finally completed the sale of PetroRig I's semi-submersible rig to Diamond Offshore Services Company, a related company of major deepwater drilling services contractor Diamond Offshore Drilling.
SembMarine declined to give details of the sale except to say it is expected to be completed by end-June.
Industry website Upstream Online, citing sources, reported last Friday the rig builder received five bids for the rig - from Seadrill, Noble Drilling, Stena Drilling, Diamond Offshore and a Brazilian contractor.
It also said four of the five bidders offered more than US$450 million.
PetroRig I is believed to have owed SembMarine over US$200 million on the US$454 million rig 1 when it defaulted on its final payment in April.
SembMarine then put the rig on the market, as it was entitled to do under its contract.
PetroRig I tried to block the sale by filing a preliminary restraining order in the bankruptcy court in New York.
PetroRig I also filed for bankruptcy protection after Norsk Tillitsman, the trustee of bonds issued by PetroRig I's parent group PetroMena, seized control of the company and two other PetroMena units, PetroRig II and PetroRig III.
The path was finally cleared for the sale when SembMarine announced on Friday that it had reached a settlement with all the parties.
Diamond Offshore is one of the world's largest drilling contractors, with 45 rigs, including 30 semis, one drill-ship and 14 jack- ups.
It acquired the bulk of its fleet through a series of astute acquisitions at bargain prices in the early 1990s.
Diamond is cash-rich and obviously on the lookout for bargains again. It just completed a US$500 million unsecured notes offer last month.
The company recently reported a first quarter profit of US$348.6 million, up 20 per cent from US$290.5 million in the previous corresponding quarter.
PetroMena units have two more semis on order with Jurong, due for delivery later this year and early next year respectively.
They are under the same contract conditions as PetroRig I.
In a separate development in the industry, Skeie Drilling & Production (SKDP), a Norwegian client of Keppel Corp's Keppel Fels rig building unit, appears to have averted a major crisis.
SKDP said last week that it was at risk of filing for bankruptcy if a proposed restructuring fell through as it had also missed payments on three N-class jack-up rigs with a total contract value of reportedly US$1.16 billion.
But on its website late last night, SKDP, which has been in negotiations with a group of bondholders, said 'an agreement on main principles with this group of bondholders has now been reached'. It added: 'Following these achievements, the board of directors believes that SKDP is not obliged to file for bankruptcy and will remain solvent subject only to formal approval of the agreed restructuring plan from the shareholders and bondholders.'
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