Keppel’s loss breaches Temasek’s conditions for takeover, says CEO

Singaporean conglomerate Keppel Corp’s on Thursday reported a second-quarter loss that breaches a threshold in state investor Temasek Holdings’ $3 billion conditional offer to buy control of the company.

Temasek offered to raise its stake and buy control of Keppel in October last year, leading to expectations of consolidation in the domestic rig building sector.

Temasek declined to comment on Keppel‘s results and the impact on its conditional offer.

Keppel‘s CEO Loh Chin Hua said: “We believe that the 20% threshold in the MAC (material adverse change) clause in respect of net profit after tax has been crossed.

The CEO said that this meant the pre-condition in Temasek’s offer had not been satisfied as of Thursday.

Loh said the company was unable to comment on the offer or the action that Temasek could take.

Keppel reported a net loss of S$697 million for the quarter ended June compared with a net profit of S$153 million a year ago. That marked its biggest quarterly loss in at least 15 years, Refinitiv data showed.

Keppel, whose businesses range from property development to rig-building, said it incurred impairments of S$919 million, mostly in its offshore and marine business.

Excluding impairments, net profit would have been up 45% to S$222 million for the quarter, it said.

“Given the continuing impact of COVID-19, 2H 2020 will probably remain very challenging,” Loh said.

Keppel‘s shares closed 3.6% lower at S$5.40 ahead of the results. They have fallen 20% this year, close to the level at which they were trading when Temasek made its conditional bid of S$7.35 per share.

Temasek already owns more than 20% of Keppel.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.