Keppel eyes development deals with private funds as O&M outlook dims

It will also monetise more assets.

Keppel Corporation is exploring potential infrastructure development partnerships with private funds in order to drive growth as its core rigbuilding business falters.

According to OCBC, Keppel is looking to develop specialised assets in which the company already has good knowledge in, and funds may be interested to take a stake in an earlier stage of the development.

To monetise these assets, they may also be injected into listed trusts and REITs once the asset stabilizes.

"This is a way for the group to recycle capital and pursue large projects without straining its balance sheet too much," OCBC said.

Keppel is exploring various avenues for growth, particularly as its offsore and marine business is under threat from persistently bleak industry outlook.

“Keppel is still busy with rig repairs and sees orders from non-drilling products, but considering that the group will be delivering 15 rigs this year, eight in 2016 and six in 2017, we think core earnings momentum may start turning downwards soon, justifying the stock’s current depressed valuations,” OCBC said.