Keppel Offshore & Marine (Keppel O&M) has signed a framework deed to defer the scheduled delivery of five jack-up rigs to Borr Drilling to 2022.

Keppel O&M signed the deed through its wholly owned subsidiaries, Keppel FELS and Offshore Partners, with Borr Drilling and a number of its subsidiaries.

The company agreed to deliver the jack-up rigs progressively. They are part of the 11 jack-up rigs ordered by Borr Drilling. Keppel O&M has so far delivered six of them.

Under the terms of the framework deed, the delivery of one rig will be deferred to the second quarter while the remaining four rigs are to be delivered by the third quarter of 2022.

In respect of all the deferred deliveries, Borr Drilling will pay holding costs and/or cost cover.

Keppel O&M said in a statement: “This follows the announcement by Borr Drilling on 20 May 2020 that it had, in response to the weakening market, entered discussions with its lenders and shipyards to, among other things, postpone yard commitments, adjust covenants and reduce amortisation, as well as defer cash interest payment to strengthen its liquidity situation.”

According to the original delivery schedule, three out of the five rigs were supposed to be delivered by the third quarter of this year and the remaining two by the first quarter of 2022.

Similar to the original contracts with Borr Drilling, Keppel O&M will partially finance three of the delivered rigs through a seller’s credit arrangement of $272.7m in aggregate. Two out of the five rigs will be also partially financed on delivery.

Keppel O&M noted that the framework deed will become effective once certain conditions, including the obtaining of key creditor approvals by Borr Drilling, among others, are satisfied.