Keppel, SembMarine to monitor Sete Brasil bankruptcy claim

SINGAPORE - Shareholders of oil rig supplier Sete Brasil - a top customer of Keppel Offshore & Marine and Sembcorp Marine - have agreed to a plan to file for bankruptcy protection.

The decision came after Sete Brasil's sole client, Brazil state oil giant Petrobras, failed to present a viable book order, Bloomberg reported on Thursday.

Sete Brasil shareholders had set Wednesday as a deadline for Petrobras to propose a book order that could pay back the capital they had injected into the company. Petrobras, which owns 5 per cent of Sete Brasil, did not vote.

 

Sete Brasil, set up in 2011 to build the world's biggest deep-water drilling fleet for Petrobras, fell into deep financial distress after it failed to secure long-term financing amid a sweeping corruption probe involving the state-run oil producer.

It has not paid either Keppel or SembMarine for orders worth billions since November 2014.

Both Keppel and SembMarine, which have set aside S$320 million and S$329 million in provisions for the delinquent Sete Brasil projects, told The Straits Times they are aware of the news.

A Keppel spokesman, however, noted the group has yet to receive any formal notification from Sete Brasil regarding the bankruptcy protection.

"We are monitoring the situation closely. If Sete Brasil files for bankruptcy protection, the legal process would take time," he said, adding it is "premature" to comment at this point. "The provision of S$230 million ... for our projects with Sete Brasil remains adequate for now."

A SembMarine spokesman similarly said: "The group will make the necessary announcements if there is material development."

The rigbuilder has seven drillships worth US$7 billion (S$9.3 billion) for Sete Brasil on its order books.

Share prices of the two companies were little impacted by Thursday's news.

SembMarine is due to announce its quarterly results next Wednesday.

tsjwoo@sph.com.sg