SINGAPORE: Keppel Corp plans to transform itself into an asset manager overseeing US$150bil (RM668bil) by 2030 and focusing on green energy, betting it would provide more stable revenue streams and earnings.
The plan, which would quadruple its managed assets and see it operate more like Canada’s Brookfield Asset Management and Australia’s Macquarie Group Ltd, marks a new chapter for Keppel, which traces its roots to a small ship repair yard corporatised in 1968.
It sold its core offshore and marine business to local peer Semcorp Marine for S$4.5bil (US$3.4bil or RM15bil) earlier this year.
“This latest restructuring reflects a fundamental shift in how we organise ourselves to operate in a nimbler manner and harness technology to grow at speed and scale. It includes relooking at how Keppel is organised,” Keppel CEO Loh Chin Hua said in a statement.
The conglomerate with an US$8.5bil (RM37.9bil) market value, which has operations ranging from data centres to renewable energy assets, will be divided into fund management, investment, and operating platforms under the restructuring.
“Keppel has a strong track record in the development and operation of real assets, such as renewables, clean energy, decarbonisation and environmental management solutions, green buildings as well as digital connectivity infrastructure,” said Loh, who has been at the helm since 2014.
A growing pool of investors including sovereign wealth funds and pension funds are interested in allocating more capital to alternative assets, he added.
“With our strong capabilities in these areas... we can play to our strengths.”
Singapore state investor Temasek Holdings is Keppel’s largest shareholder with a 21% stake.
It did not immediately reply to a request for comment about the restructuring.
As a conglomerate, Keppel is trading at a discount to the sum of its parts, Citi analyst Brandon Lee said in a note, with the new structure expected to narrow the gap.
Keppel plans for a four-fold rise in assets under management (AUM) to S$200bil (RM667bil) by 2030, with an interim target of achieving S$100bil (RM333.6bil) worth of AUM by 2026-end.
The company said the shake-up could result in annual savings of between S$60mil (RM200mil) and S$70mil (RM233.5mil) by 2026, including from centralising support functions.
The firm is now targeting between S$10bil (RM33.4bil) and S$12bil (RM40bil) in cumulative asset monetisation by 2026-end. It has already achieved asset monetisation of S$4.9bil (RM16.3bil) as at end of first-quarter of fiscal 2023 since the program was launched in late 2020.
Shares in Keppel rose 1.1% yesterday, beating a 0.9% drop in the wider market. The shares are 32.5% higher since the start of the year, boosted by simplifying its business, mainly through asset sales. — Reuters
