Keppel To Restructure KHZ Under Keppel FELS

Tuesday, October 09, 2001
Keppel Corporation Limited (KCL) will restructure Keppel Hitachi Zosen Limited (KHZ) under Keppel FELS Limited (Keppel FELS), the rig building and repair arm of Keppel FELS Energy and Infrastructure (KFEI), to create a global leader in servicing the international marine and offshore market.

KCL will transfer its entire 61% interest in KHZ to Keppel FELS immediately upon completion of the privatization of Keppel FELS Energy & Infrastructure Ltd (KFEI) in early to mid November this year. Shareholders of KFEI have given their approval for the delisting of the company on October 5.

KCL Executive Director Choo Chiau Beng, said, ?The restructuring of KHZ under Keppel FELS will strengthen Keppel?s global presence through the combined business and operational network of 12 shipyards in strategic offshore markets and hubs of major sea routes around the world.?

Choo is also Chairman/Managing Director of KFEI and Chairman of KHZ. The 53-year-old veteran of the offshore construction industry is one of the prime movers who through Keppel FELS has placed Singapore on the world map as the leader in the construction of offshore jack-up rigs and a major player in the construction of semi-submersible rigs.

Backed by an energetic and innovative team driven by a ?can-do? attitude, Keppel FELS has become a multi-billion dollar, technology-based, market-driven global leader. Through swift actions, innovative strategies and foresight, the team in Keppel FELS has led the company to grow in strength in the midst of various offshore market downturns, and has achieved the record of building about 60% of the world?s jack-ups on order since 1996.

?We are taking advantage of the current upturn in the offshore oil and gas industry to strengthen our global position in the provision of sophisticated engineering solutions and shipyard services. Oil and gas exploration activities are increasing, and with the restructuring of KHZ under Keppel FELS there is greater flexibility in utilizing the resources of both companies,? said Choo, explaining the rationale for the restructuring.

Choo is spearheading the taskforce that has been set up to work on areas of co-operation to optimize profitability of the two companies. He said, ?Our first task is to realize the full business potential of the expertise now residing in Keppel FELS and Keppel Shipyard which is the bellwether of Singapore?s expertise in FPSO and FSO conversions.?

Keppel Shipyard, a division of KHZ, has completed 34 FPSO and FSO conversions since 1981, and is presently carrying out work on several FPSOs in its yard. It has also successfully completed in record time what is believed to be the world?s most challenging and complex FPSO conversions to date, Espadarte. This is testimony to Keppel Shipyard?s technical expertise and project management skills.

?Our Singapore yards will serve as the center for high value-added design and engineering work as well as complex conversions and sophisticated shipbuilding. They will also provide these expertise and the skilled manpower resources to our overseas yards which are strategically located close to our customers,? added Choo.

Choo is confident of the success of this strategy. He said, ?With this, Keppel is well positioned to be a quality, customer-focused and market oriented Group offering a comprehensive and competitive package of services to its international clientele.?

KCL has earlier mapped out the Keppel Group?s strategy to enhance the position of its world leaders such as Keppel FELS and KHZ, and to concentrate on businesses that it can nurture into global concerns such as power generation, environmental engineering with focus on incineration, network engineering and property.

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