SembMarine again extends standstill agreement for rig delivery

A Sembcorp Marine employee at its Jurong Shipyard in Singapore.
A Sembcorp Marine employee at its Jurong Shipyard in Singapore.PHOTO: REUTERS

SINGAPORE - Rig builder Sembcorp Marine announced on Friday (July 7) that the standstill agreement between a wholly-owned unit Jurong Shipyard and the North Atlantic Drilling group for the delivery of a semi-submersible drilling rig has been further extended.

This is the fifth time the delivery has been delayed since it was first announced in December 2015.

The standstill agreement for the rig, the West Rigel, has now been pushed back for another six months to Jan 6.

During the standstill period, North Atlantic Drilling will continue to market the rig for an acceptable drilling contract, while Jurong Shipyard will have the right to sell it at an acceptable price, SembMarine told the Singapore Exchange in a filing.

The rig will remain at Jurong Shipyard in Singapore during this period.

In the event that no employment is secured and no alternative transaction is completed when the standstill period concludes, the parties will form a joint asset holding company for joint ownership of the unit, which will be 23 per cent owned by North Atlantic Drilling and 77 per cent held by Jurong Shipyard, said SembMarine.

North Atlantic Drilling will then continue to market the rig for the joint asset holding company for an acceptable drilling contract, while Jurong Shipyard will continue to market the Unit for sale.

Shares of SembMarine were down 0.3 per cent or half a cent to $1.68 as at 9.30am on Friday after the announcement was made in the morning.

tsjwoo@sph.com.sg