The United States-based alternative asset manager Apollo (NYSE: APO) will invest $1.5 billion through Apollo-managed funds and affiliates into Keppel Ltd.‘s Keppel Offshore Fund (KOF), a portfolio of offshore energy assets managed by Singapore’s Keppel (SGX: BN4).
In a statement on Monday, Apollo said the transaction is rated investment grade and is one of the first of its kind in Southeast Asia. The investment is subject to customary closing conditions including regulatory approvals.
In a statement on Tuesday, Keppel said Apollo’s investment is part of a program to progressively monetize up to 10 legacy rigs, with a total program value of approximately S$3.7 billion ($2.9 billion).
Keppel’s indirect subsidiary Rigco Holding Pte. Ltd. will divest six operational rigs to KOF in 2026 for a total of approximately S$1.2 billion. Apollo will provide cash for the acquisition, while Keppel will make 50 percent of its contributions to the fund through a contribution in kind.
Keppel can receive cash consideration of approximately $478 million from the six-rig divestment in 2026. The transaction will contribute approximately S$1.2 billion toward Keppel’s asset monetization program for 2026 and increase its funds under management by approximately S$3.9 billion.
In addition, Keppel plans to progressively complete and may divest four further rigs in various stages of completion to KOF from 2027 to 2028. The move can generate $988 million in additional cash proceeds for Keppel. Construction of the four rigs will be funded using existing cash retained in Rigco.
The final three of Keppel’s 13 legacy rigs are not part of this transaction and Keppel is exploring separate monetization options for them, according to the statement.
Jamshid Ehsani, Partner at Apollo, said the partnership with Keppel demonstrates growing global demand for high-grade capital solutions. Apollo is supporting Keppel’s efforts to address global energy security using Apollo’s permanent capital base and structuring expertise, the executive added.