We highlight potential negative news for Keppel Corp. On 17 April 2009, one of its customers, Skeie Drilling & Production (SKDP) had proposed to extend the delivery dates of three N-class rigs and to raise additional funding of US$170m. SKDP is in breach of a bond agreement calling for additional US$18m equity by end May, if no charter contract is secured for the rig. It had also been unable to meet the US$40m milestone payment due on 4 June for Rig 3. The breaches may result in a breach of bank loan of US$675m to be terminated. We estimate that in the worst case, cancellation of all three rig orders will impose a US$80m impact on 2010 earnings (13% impact), but the likely scenario could be forced sale by either banker or Keppel, trimming Keppel's potential negative earnings impact to just 4-9%. We maintain our Underperform rating on Keppel and S$7,20 target price.