Apollo has agreed to invest $1.5bn in a new Keppel-managed fund established to hold up to 10 legacy offshore drilling rigs, extending a disposal strategy that lets the Singapore group recycle assets from its former offshore and marine business while keeping control of the platform that manages them.

The Keppel Offshore Fund will initially acquire six operational rigs from Keppel subsidiary Rigco Holding for about S$1.2bn ($957m). Keppel is expected to receive about $478m in cash from the first phase, which is scheduled to close this year.

Apollo will fund the cash portion of the acquisition, while Keppel will contribute its 50% interest in the fund in kind. The Singapore group will continue to manage the assets and collect advisory and recurring management fees.

Keppel expects the initial transfer to add about S$3.9bn to its funds under management, which stood at S$95bn at the end of 2025. The company will book an estimated S$92m accounting loss on the sale of the first six rigs in its first-half results.

A further four rigs, currently at various stages of construction, could be completed and transferred to the fund between 2027 and 2028. Their sale could generate another $988m in cash for Keppel. The remaining three units in Rigco’s 13-rig portfolio are not included in the transaction.

Keppel took full control of Rigco and its legacy fleet in late 2024 as part of a plan to accelerate the disposal of assets left over from its former offshore and marine business. The company also gained control of S$843m held by Rigco to fund the completion and monetisation of unfinished units.

The rigs were separated from Keppel Offshore & Marine before its merger with Sembcorp Marine to create Seatrium.

Keppel has repeatedly said it has no intention of returning to rigbuilding and is instead seeking to convert the legacy fleet into cash and fee-bearing assets. The Apollo investment remains subject to regulatory approvals and other customary closing conditions.