Keppel raising stakes in 2 Philippine associate companies

Keppel to garner S$86.5mln total cash consideration to add up its stakes in SSEI and CLI.

Keppel Corporation Limited (Keppel Corp), through a subsidiary Keppel Philippines Marine Inc, (KPMI), is raising its shareholdings in two associated companies, Subic Shipyard and Engineering Inc. (SSEI) and Consort Land, Inc. (CLI) to boost its Near Market, Near Customer strategy in the Philippines, according to a Keppel report.

SSEI is a leading shipyard located in Subic Bay, the Philippines, which provides repair, conversion and building services to shipowners and offshore operators in the region. It also carries out routine and specialised machinery reconditioning works, as well as steel fabrication for marine and offshore structures. CLI owns 72 ha of land including the 20 ha on which SSEI is situated.

A total cash consideration of approximately S$86.5 million will be made by Keppel to raise its effective stakes from 44% to 83.9% in SSEI and from 33.7% to 38.7% in CLI. The sale and purchase of shares in both companies is expected to be completed by the end of September 2010, following which, SSEI will become a Keppel subsidiary.

Mr Nelson Yeo, Managing Director (Marine) of Keppel Offshore & Marine and Chairman of KPMI, said, “We have been present in the Philippines for more than three decades, and are continuously improving on the safety, quality and productivity of our yards, as well as equipping them to undertake more sophisticated work to meet the increasing market demand for high value services.

“The move to take a bigger share in the Subic shipyard reinforces our Near Market, Near Customer strategy to enhance the depth and breadth our services to global customers. It also demonstrates our confidence in the offshore and marine industry. As a majority shareholder, Keppel will be in a better position to add value to the Subic shipyard and fortify our offerings to meet the growing needs of our customers.”

The above transactions are not expected to have any material impact on the earnings per share and net tangible asset per share of Keppel Corporation for the current financial year.

Keppel in the Philippines
With over 30 years of operating experience in the Philippines, Keppel has built up a solid reputation as a reliable and versatile solutions provider with a quality track record.

In recent years, Keppel has invested more than PHP3 billion (S$89.6 million) to boost its capacities and upgrade its workforce in the Philippines to meet the market’s increasing demand for high value services. This includes the upgrading of equipment and machinery at Keppel Batangas, and a major expansion of the drydock and berthing facilities, and the building of a new training hub and additional workers’ accommodation/amenities at Subic Shipyard.