SINGAPORE – Keppel Corp is looking to sell about $3 billion to $5 billion of assets over the next three years and redeploy the funds to seize new opportunities and improve returns.
The move comes as the firm executes long-term plans to build growth engines for the future, said Keppel chief executive Loh Chin Hua at a virtual briefing on Tuesday (Sept 29).
“As we pursue our growth initiatives in data centres, environmental solutions, renewable energy, integrated urban development and asset management, we will also need to review our business portfolio from time to time,” added Mr Loh, who did not disclose the segments earmarked for asset disposal.
Keppel, one of the world’s largest oil-rig makers, said it has identified assets with a total carrying value of about $17.5 billion as at June 30 that can be sold off over time, with the proceeds channelled towards growth initiatives.
These include the group’s landbank, development projects, various funds and investments, as well as non-core assets such as Keppel O&M’s oil rigs. Mr Loh declined to share more details, citing commercial sensitivity.
They do not include key business platforms, fixed assets such as Keppel O&M’s yards, or some of the group’s units in real estate or other investment trusts.
As well as the asset sales, Keppel Corp is running the rule over its offshore and marine business amid a challenging environment for the sector.
Its options include reviewing Keppel O&M’s business model, assessing its capacity and global network of yards, and restructuring to seek opportunities as a developer of renewable energy assets, as well as mergers and asset sales.
The review is being carried out as a “very immediate task” and all options will be considered, said Mr Loh, who noted that the exercise is aimed at maximising long-term shareholder value.
While the process is still at a “very preliminary stage”, he said that “it should not take years; it could take months”.
Mr Loh’s comments came as Keppel reaffirmed the Vision 2030 road map unveiled in May that outlined the company’s focus on four key areas – energy and environment, urban development, connectivity and asset management.
Keppel’s accelerated implementation of Vision 2030 comes after Singapore investment company Temasek, which is its single largest shareholder, pulled out of its $4.1 billion partial offer to gain control of the firm in the light of its poor financial showing in August.