Singaporean conglomerate Keppel Corp said on Tuesday it had identified assets worth 17.5 billion Singapore dollars ($12.8 billion) that could potentially be monetized, including through sales, and began a review of its loss-making offshore and marine (O&M) activities.
The plans unveiled on Tuesday are part of Keppel’s ten-year strategy it announced earlier this year to refocus its portfolio on energy and environment, urban development, connectivity and asset management.
Keppel said it was exploring options including strategic mergers and divestitures for its offshore and maritime businesses, which build oil rigs and have been battered by falling energy prices.
In August, public investor Temasek Holdings dropped its $3 billion bid to raise its stake in Keppel to a majority stake after the company reported weak results.
Analysts had long hoped for consolidation in the rig construction sector thanks to a deal between Keppel’s O&M business and smaller rival Sembcorp Marine. Anticipation of a deal grew in June, when Temasek backed a S$2.1 billion rights issue by Sembcorp Marine.
Keppel, whose business ranges from telecommunications to real estate development, said it would seek to monetize up to $3.7 billion in assets such as some of its land and investment properties over the next few years.
The company “will seek to realize the group’s current potential by unlocking approximately S$3-5 billion ($2.2-3.7 billion) of our monetizable assets over the next three years, which will be redeployed to capture new new opportunities and improve returns,” CEO Loh Chin Hua said in a statement.
Keppel said the total assets he has identified to potentially monetize over time have a total book value of around S$17.5 billion.
($1 = 1.3698 Singapore dollars)
(Reporting by Aradhana Aravindan in Singapore; editing by Jason Neely)