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Wednesday, June 10, 2020 

Keppel Corporation of Singapore has issued a statement regarding a contract secured in March 2018 by its subsidiary Keppel FELS from Awilco Drilling for the construction of a mid-water semisubmersible drilling rig for harsh environment use, worth about US$ 425m.

Keppel FELS has received a notice from Awilco Rig 1 Pte, a wholly-owned subsidiary of Awilco Drilling, purporting to terminate the contract, alleging certain breaches relating to the project management, schedule, resourcing and compliance. This notice came shortly before the next due date for payment of an instalment of US$ 31.875million from Awilco, the payment having alredy been deferred for about three months at Awilco’s request.

Keppel says that under the terms of the contract, an effective termination by Awilco might entitle it to the return of payments already made (about US$ 54m) with interest, or to pay for the work done by Keppel FELS and take over the rig.

Keppel's statement says: "Keppel FELS denies the allegations by Awilco in the notice and has rejected the purported termination of the contract. Keppel FELS is currently considering its legal options and evaluating potential financial impact in consultation with its advisors. Keppel FELS has further reserved all its rights under the contract, including the right to retain the instalments already received and to seek compensation for the work done to date in the event that Awilco defaults in the payment of the 9 June Instalment."

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