Keppel Infrastructure Holdings Limited (Keppel Infrastructure) and Keppel Infrastructure Fund Management Pte Ltd (KIFM), as Trustee-Manager of Keppel Infrastructure Trust (KIT), have signed a non-binding term sheet with the intention to enter into definitive agreements with respect to the sale and purchase of a 50% equity stake in Marina East Water Pte. Ltd. (MEW), which owns the Keppel Marina East Desalination Plant (KMEDP), for an enterprise value of approximately S$355 million (Proposed Transaction). Keppel Infrastructure is the Sponsor of KIT.
The Proposed Transaction is subject to customary closing conditions including approvals by shareholders and PUB, as well as the receipt of applicable regulatory approvals.
Upon the completion of the Proposed Transaction, it is expected that Keppel Infrastructure and KIT will each hold a 50% joint-controlling stake in MEW, with KIT receiving 100% of the economic interest from MEW.
KMEDP will continue to be operated and maintained till 2045 by Marina East Water O&M Pte. Ltd., a wholly owned subsidiary of Keppel Infrastructure, allowing MEW to benefit from proven water services and diverse operating capabilities of Keppel Infrastructure while contributing to Keppel Infrastructure’s long-term, recurring income from the operating and maintenance (O&M) fees.
Ms Cindy Lim, CEO of Keppel Infrastructure said, “The proposed transaction involving the KMEDP is part of the Keppel Group’s asset monetisation strategy and asset light business model under Vision 2030. Through unlocking value from KMEDP, the Group will be able to redeploy capital towards other growth initiatives, such as renewables and environmental infrastructure, as well as low carbon and decarbonisation solutions in line with Vision 2030. As the developer of the KMEDP, Keppel Infrastructure is well placed to continue operating the plant and maintaining the high standards required for this state-of-the-art infrastructure.”
Mr Jopy Chiang, CEO of KIFM, said, “This is a highly anticipated acquisition that will enhance the strength and resilience of the KIT portfolio. KMEDP is a stellar asset from our Sponsor that will add to KIT’s green credentials, reinforcing our commitment to invest in high-quality and energy efficient assets. Besides being one of the key assets contributing to Singapore’s water resilience, KMEDP has a long-term contract with a strong counterparty, which will improve KIT’s cash flow visibility. The strategic addition of KMEDP is expected to support the overall distributable income per unit accretion to our Unitholders.”
The KMEDP, Singapore’s fourth desalination plant, is capable of producing 137,000 cubic metres (about 30 million gallons) of fresh drinking water per day. The plant commenced commercial operations on 29 June 2020 and has a 25-year concession, from 2020 to 2045, under a Design, Build, Own and Operate (DBOO) arrangement with National Water Agency, PUB. Located at Marina East, the KMEDP is Singapore’s first and only large-scale dual mode plant, which can treat seawater or rainwater drawn from the Marina Reservoir.
Keppel Corporation Limited, the parent company of Keppel Infrastructure, and KIT will make the necessary announcements, if and when, there are material developments.
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About Keppel Corporation
Keppel Corporation is one of Singapore’s flagship multinational companies with a global footprint in more than 20 countries. Keppel provides solutions for sustainable urbanisation, focusing on four key areas comprising energy & environment, urban development, connectivity and asset management. With sustainability at the core of its strategy, Keppel harnesses the strengths and expertise of its business units to develop, operate and maintain real assets, which provide diverse solutions that are good for the planet, for people and for the Company.
About Keppel Infrastructure Trust
Keppel Infrastructure Trust (KIT) is a diversified business trust listed on the Singapore Exchange with approximately S$4.5 billion in assets under management as at 31 March 2022. Its goal is to deliver sustainable and growing returns to Unitholders, through a combination of recurring distributions and capital growth.
KIT's portfolio of strategic infrastructure businesses and assets provide essential products and services to a wide array of customers including government agencies, multinational corporations, commercial and industrial enterprises as well as retail consumers.
The Trustee-Manager for KIT is Keppel Infrastructure Fund Management Pte. Ltd., a wholly-owned subsidiary of Keppel Capital Holdings Pte. Ltd., a premier asset manager with a diversified portfolio in real estate, infrastructure, data centres and alternative assets in key global markets. KIT is sponsored by Keppel Infrastructure Holdings Pte. Ltd., which invests in, owns and operates competitive energy and infrastructure solutions and services.
The value of Units and the income derived from them may fall as well as rise. Units are not obligations of, deposits in, or guaranteed by, KIFM or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Investors have no right to request KIFM to redeem their Units while the Units are listed. It is intended that Unitholders may only deal in their Units through trading on the SGX-ST. Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. This announcement is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for Units. The past performance of KIT is not necessarily indicative of the future performance of KIT. This announcement may contain forward-looking statements that involve assumptions, risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from other developments or companies, changes in operating expenses (including employee wages, benefits and training costs), governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the KIFM’s current view on future events.
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