SINGAPORE -- Singaporean conglomerate Keppel Corp. announced on Monday that its rig-building subsidiary, Keppel Offshore & Marine (O&M), will sell its Rotterdam shipyard to Danish company Damen Shipyards Group.
The rig builder explained that the sale comes on the heels of a "strategic review" that aims to optimize operations and rationalize its global network of shipyards as demand for oil exploration slows. The transaction amount was not disclosed.
The two parties hope to close the deal by the end of June. In a press release, Keppel indicated that Damen intends to continue operations at the Rotterdam shipyard with its approximately 250 employees. Meanwhile, Keppel will continue to service the offshore oil and gas market in Europe through its global network of yards in Singapore and other locations.
Singapore is home to Keppel and conglomerate Sembcorp Industries, which has its own rig building subsidiary, Sembcorp Marine. As low oil prices and the emergence of new resources such as shale gas lessens demand for exploration, the Singaporean conglomerates have been optimizing their oil and gas resources to cut costs.
Keppel laid off about 10,600 workers at its offshore and marine unit in 2016 and took an impairment charge of 336 million Singapore dollars ($310 million) for fixed assets and investments in its offshore and marine division. Last October, chief executive Loh Chin Hua took a 10% cut on his base pay, reducing his total remuneration by 11.6%.
To offset the sluggish marine businesses, Keppel and Sembcorp have been active in other areas, such as green energy and real estate in emerging Asian markets. On Monday, Sembcorp announced it won a bid to own, develop and operate a new wind power project in India, slated to be fully commissioned before March 2019.
Meanwhile, Keppel announced in March that it will increase its stake in an office complex in Ho Chi Minh City, Vietnam. It recently opened a new 23-story office building in Yangon, Myanmar.