152 views
Stock photo. Credits to Unsplash.

Keppel O&M challenges government decision on customer claims on rig contract

The company has already filed an injunction to prohibit payment on a standby letter of credit.

A subsidiary of Keppel Offshore and Marine is challenging a decision by a government authority that the contractual formulas on a rig contract dispute were invalid.

Keppel O&M is referring to an announcement it made on 7 February 2019 on clarifications relating to customer potential claims arising from disputes over the validity of certain foreign exchange fluctuations and cost escalation contractual formulas in a rig contract entered into by an entity which is 75% owned by Keppel O&M.

The Keppel owned-entity had provided a US$126.6m standby letter of credit in favour of the customer for purposes of repayment of amounts received by the entity. The sum was then calculated based on the contractual formula.

Keppel said that on 12 September 2022, following a decision by the relevant government authority that the contractual formulas were invalid, the customer sought to call on the standby letter of credit. 

ALSO READ: FCT to acquire 10% additional stake at Waterway Point for $73.6m

“The company considers that the decision is still subject to possible modification and is not final, and the call was premature. The KOM entity has since applied for an injunction from the Singapore Court on 12 September 2022 to prohibit payment on the standby letter of credit. The KOM entity has also filed legal proceedings in the local court to challenge the decision of the relevant authority,” Keppel said.

Keppel said that it has previously made a provision in its accounts for the full amount payable under the standby letter of credit, and considers that no further provision is required. 

“Accordingly, the Company does not consider there to be any material impact on its overall financial performance. The Company will provide further updates as and when there are any material developments in relation to these legal proceedings,” Keppel added.
 

Follow the link for more news on

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Top News

SIT, DNV ink 3-year partnership on maritime decarbonization and digitalization
The parties will cooperate in three key areas.   The Singapore Institute of Technology (SIT) has joined hands with a maritime advisor, DNV, to advance net-zero ambitions in the Lion City’s maritime sector.

Exclusives

Where to invest your millions in real estate
Amongst locations, realtors suggest the Core Central Region.   Individuals seeking shelter in the real estate market amidst the rising inflation must consider three things before deciding where to invest their millions in.   George Tan, managing director of Savills Digital Residential Marketing, said one of these factors is location.    Tan said buyers should consider areas which are highly demanded and well located—easy access to prestigious or international schools, MRT, malls and food and beverage (F&B) establishments. All these will contribute to good rental demand.   PropNex realtor, Andy Lim, echoed this, adding that buyers should particularly invest in properties within one kilometre of the prestigious schools.