Keppel to gain $20.7mn from selling 35% share of Annto

The company will sell its share to Midea for an after tax net proceed of approximately $52.6mn.

Acquired in 2006, Annto offers integrated integrated logistics services of transportation, warehousing and distribution in China. Besides growing its logistics business over the years, Annto is also looking into the expansion of its manufacturing business, which does not fit into Keppel T&T's businesses. Midea, therefore, offered to buy over Keppel T&T's stake in Annto.

CEO of Keppel T&T, Mr Pang Hee Hon said, "although it has been a very successful and rewarding four-year partnership with Midea, the sale of Annto will allow Keppel T&T to use the proceeds to grow and strengthen our core businesses of integrated port logistics and third-party logistics in our chosen Chinese markets.

"Besides our river port in Foshan and our upcoming distribution centres in Nanhai and Tianjin, we are currently exploring opportunities to replicate our success and bolster our presence in several cities in China."

Just earlier in January 2011, Keppel T&T signed the agreement for land use rights with the Sino-Singapore Tianjin Eco-City Investment and Development Co Ltd (SSTEC) for the development and operation of a green integrated logistics distribution centre in the Tianjin Eco-City, marking Keppel T&T's first and significant step into North China.

Spanning 2.8 hectares and featuring 35,000 square metres of modern warehouse space when completed, the integrated logistics distribution centre will be wholly-owned and operated by Keppel T&T.

The abovementioned conditional sale is expected to be completed this year and is subject to the approvals by the relevant authorities in China. Thebook value of Annto was S$31.9m as at 31 December 2010.