Tham Sai Choy Joins Keppel as Temasek Bids to Take Over the Firm
Amid the ongoing turmoil in the rig building sector, Keppel Corp is having a tough time dealing with the low oil prices. To help the Singaporean conglomerate, Temasek Holdings has offered to purchase it in a S$4.1 billion (US$3 billion) deal.
Collapsing oil prices in the past five years have come up as a huge blow for two local players, namely Keppel’s offshore and marine unit and Sembcorp Marine.
As stated by the Senior Research Analyst of Bank of Singapore, Low Pei Han, “There has long been talk of a potential restructuring of businesses under the Keppel Corp and Sembcorp Industries stable such as the merging of the offshore & marine yards.”
Currently, Temasek owns 20.5 percent of Keppel and is aiming to further increase its stake to 51 percent depending on domestic and foreign regulatory approvals that can take several months.
Commenting about the future prospects in a statement, the President of Temasek International, Mr Tan Chong Lee said, “The partial offer reflects our view that there is inherent long-term value in Keppel’s businesses, notwithstanding the challenges presented by the current business and economic outlook.”
The announcement has uplifted shares in rig builder Sembcorp Marine by 12 percent. On October 15, shares surged further 2.2 percent while shares in Sembcorp’s parent Sembcorp industries were steady after rallying 10 percent in the previous session.
Reports that came out on October 17 show Keppel earning $159.3 million for Quarter 3 which is a plunge of 29.7% from $226.6 million in the same year. This means earnings per share reduced from 12.5 cents for Quarter 3 of 2018 to 8.8 cents for Quarter 3 of 2019.
As per analysts, the offer made by Temasek would pave way for consolidation in the offshore and marine industry of Singapore. As said by KGI Securities Singapore Research Head Joel Ng, “Competition is only expected to increase as Chinese and South Korean shipyards continue to consolidate, thus creating industry heavyweights with a significantly larger footprint.”
Sources claim that SNC-Lavalin Group who purchased Atkins in 2017 approached potential bidders like Temasek about the sale of the engineering firm.
As Temasek Holdings is planning to make a bid for Keppel Corporation, the former chairman of KPMG Singapore and Asia Pacific, Tham Sai Choy is all set to become a non-executive director of Keppel. Apart from him, the shipping industry veteran, Teo Siong Seng and Penny Goh, the senior partner of Allen and Gledhill are joining as non-executive directors.
Sources claim that Tham Sai Choy will be taking over the seats only after the beginning of the next month.
The company made announcement said that Mr Tham Sai Choy would be a suitable addition to the existing panel of Board Members as he was a responsible person in handling the global strategies and planning of KPMG. He proved influential in developing the firms’ capabilities in cybersecurity, data analytics and digital transformation.
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