March 20, 2017

Keppel Corp— Upstream reported that Borr Drilling is looking to acquire Transocean’s jack-up fleet (including its five newbuilds at Keppel) for US$1.2b. Borr is already raising capital of the same amount.

Estimating US$708m for the newbuilds (original price tag: US$1.1b), we estimate the impact to Keppel is a loss of 8-14 S cents/share. Actual impact is subject to the final deal.

Maintain HOLD, TP remains at S$6.45. –UOB

Keppel Corp closed at S$6.850 today.