More divestments on the cards for KepCorp as O&M prospects dim

Will it sell its stake in M1?

Keppel might be eyeing more divestments to boost earnings while its key offshore and marine business continues to languish, according to a report by DBS.

The report noted that Keppel could engage in value-unlocking divestments to free up cash, which in turn can be used to pay down debt.

“In Keppel’s case, it may also reduce the conglomerate discount on its stock. M1 is a possible candidate for sale; its fundamentals are uninspiring. We estimate Keppel Corp’s stake in M1 to be ~S$440m. Injection of Infrastructure assets such as the Woodlands Wafer Fab Park into KIT, to whom Keppel Infrastructure acts as sponsor, could be another alternative,” said DBS.