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Keppel Corporation selling assets

I comment as a citizen and not as a shareholder.

It was reported that Keppel Corporation is looking to sell about $3 to 5 billions worth of assets over the next 3 years and redeploy the funds to seize new opportunities for better returns.

All that sounded very logical and clever to many people except that I am not totally sold on their explanation.

Common sense tells me that people and companies get rid of their liabilities and accumulate assets whereas in this case, Keppel Corporation is selling away its assets leh.

I ask which and what are the assets that they intend to sell? Are they in growing crowded industries assets with reducing profit margins or are they in sunset industries assets or what assets?

Keppel Corporation is a Singapore blue chip company and a government linked company. I ask will the pap government help them sell their assets or help them to sharpen the competitive edges of their assets?

I care and I worry. Think?

 

Simon Lim

 

 

yyy
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27 Responses to “Keppel Corporation selling assets”

  • Tremendous:

    So if one of the parties selling the assets is Keppel Marine under Ivan the guy, it meant he knew before elections that Keppel was not stable and he wanted to jump ship to Parliament. Too bad he didn’t make it.

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  • uselesstankl:

    What Blue Chip company you’re spewing about??

    It’s in sunset industry le….

    In Japan, Europe, these industries HAD CLOSED SHOP DONKEY YEARS BACK, BECAUSE THEY CANNOT IMPORT SLAVES TO WORK THEM.

    Here you have a bunch of gov ppl ” BRIBES ”

    TO STAY IN BUSINESS FOR 20 YEARS….

    YES, the MOST USELESS KINDS, USING ” BRIBES ”

    TO STAY IN BUSINESS !!!!

    you call them ” blue chips ”

    No wonder LKY said sinkies are ” DAFT “

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  • liew mun leong must be jailed:

    1, pap Ljs and pap Cbs all like to act like they are the best business folks on earth, egged on by a 61% team of sycophants, cheering them about how nice they look in their naked dresses.

    2, pap Ljs and pap Cbs have had a measure of success in 61% sheep island, all because if pap raises prices, sure as sunrise prices rise. which business does not prosper if price hikes are levied whenever profit numbers don’t look good.

    3, so much so for a citizen service such as healthcare, every public hospital has this ffffing land cost priced into everything. land cost at market rates for land which pap acquired on the very cheap.

    4, much worse, pap fills all the pap businesses with sycophants, retired useless generals, retired secretaries, retired ministers, all of whom really cannot sell a whistle without giving it away.

    5, with so much of 61% sheep CPF money as seed money, how come, then, pap gic pap temasick pap companies all don’t do well? well, besides the points listed above, pap folks have one mistaken notion. just because they pay each other S$m they think, now, finally, they are there in the same league as those genuine business folks. what a sorry mistake.

    iN tHe eNd, who pays for all the pap abuse of state assets aka 61% sheep CPF money? aha. 61% sheep pays for it.

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  • oxygen:

    @ Simon Lim

    HAD A QUICK GLANCE OF ITS LAST FINANCIAL STATEMENTS, Keppel Corp is under tremendous (increasing) pressure to rebalance its balance sheet, namely its massive term loans due for restructuring.

    The money has to come from famous “auntie” – a bit stressful for her too given her own portfolio’s shrinking asset values, particularly Chinese banks “chips” in the SWF. The other favourite “sons” stretching out a hand for money is SIA and Sembawang.

    SIA must fly, come what may. I don’t know what has happen or will happen to Sembawang, but here is one take I source from internet.

    https://www.drwealth.com/keppel-corp-sembcorp-ind-and-sembcorp-marine-to-sell-or-not-to-sell/

    Of course, the last resort for both Keppel and Sembawang are to raise equity capital.

    Here Keppel Corp has big stumbling blockages – institutional shareholders are a minority, if we leave out “auntie”. Retail shareholders in the post Covid-19 era worry about mortgage and food on the table even if shaky employment security. And Sinkies investors including famous “auntie” SWF are a minority – most of its investors are OUTSIDE LEE-jiapore. It may NOT be legal/convenient to offer capital issue prospectus in these foreign sovereigns, particularly in the US.

    That means the options for Keppel Corp is limited – sell assets, rebalance its balance sheet to more sustainable gearing, and wait out the storm to cultivate/manage new growth environmentally sustainable growth (ESG) sector from the beginning – almost like a re-birth of Keppel Corp 4 decades ago.

    The problems facing divestment in urgency is extracting value in declining market opportunity in non ESG sector – for Keppel, the bulk of its assets are in Keppel Land and Keppel O & M (offshore & marine). Return on assets in Keppel OM is very poor – first tiny profit achieved last year since 2016. Oil and gas are fossil fuel are dead end business. Oil is transportation-led and lithium-nickel-cobalt battery technology is new found darling in that space. The big SURPRISE in wait is HYDROGEN ENERGY looming that nuclear power even won’t be able to compete – forget the off-shore gas extraction.

    The other big sector in Keppel bal/sheet is property. In the post-Covid 19 era, the world is mired in massive debt/money printing overload sinking in a sea of low/negative interest rate environment (no business want to borrow cheap money when business return on asset is lower still than cost of money), fixed assets like property is risks – no return – of adventures. Peasants won’t buy property, commerce will rent office working from home.

    Property and offshore marine business is hardest to sell in sizes.

    Keppel NTA is over $6.50 per share, mkt is trading it $4.40. Share mkt is reading massive write-off on divesting its property/O & M asset if they can be sold.

    Go figure.

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  • uselesstankl:

    Item

    Cost/Claims limit

    Hospital stay (normal ward)

    $1,500 per day

    MediShield Life

    $700 per day

    MediSave

    $450 per day

    Balance payable in cash

    $350

    Do note that you DO NOT have to use your MediSave. You may choose to pay the remaining $800 all in cash.

    However, if you decide to use your MediSave, you are bound by the withdrawal limit. In this case, $450 per day for a normal ward. MediSave withdrawal limits apply no matter how much you have in your MediSave account at the time.

    XXXXX

    450 A DAY IN NORMAL WARD ????
    EVEN A USA, UK HOSPITAL DON’T COST 450 A DAY IN NORMAL WARD !!!!

    Tomorrow, some gov idiot will come out to say gov subsidies not ” FACTORED” in yet.

    REALLY ???

    WHY ????

    WHY YOU NEED GOV SUBSIDIES , IN THE FIRST PLACE PRIOR TO GETTING THE ” BILL”

    IS THIS NOT A ” SCAM ”

    ITS IN ALL GOV BILLS, THE WORD ” SUBSIDY ” IS TOO LOOSE……

    EVERY BILL YOU GET FROM GOV, PAP GOV !!!

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  • TumasikPatriot:

    How many Man years needed to KNOW the asset of Kepple??? or is that too a Kept Secret

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  • xoxo:

    Sell *assets*?
    Then GO OUT TO BUT OTHER PEOPLE’S LIABILITIES liks their * TOO BIG TO FAIL BANKS*?

    SCHOLARS *RUNning* or *RUINing* good organisations built by 1G?

    Scholars in GOVERNMENT,SCHOLARS in GLCs,even a notoriou$ WIFE and SCHOLARS in CIVIL $ervice?

    ALL $ame $ame,TAKE TOP $alaries,DO FARK OFF?

    SCHOLARS ARE OVER-HYPED especially PRESIDENT N SAF SCHOLARS.

    PLS RID OFF these LOUD MOUTH$ WHO ARE NATO mostly!!!

    Save SG!

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  • xoxo:

    Hahaha! First,we have Tema$ICK HOLE-ding$; now,we have Keppel Cor$pe???

    Scholars my foot!

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  • Keppel is a dog:

    Keppel’s shipyard and rig business cannot compete with Korean and Chinese companies in the same business. This should have been clear years ago when Keppel had to pay a bribe to get business. It got caught in Brazil and had to pay a huge fine US$500+m. Over the last few years only its property business is making money and it redevelop the land previously used by the shipyard. Temasek wanted to merge Keppel and Sembawang but this was called off after the sharp drop in Keppel share price.

    Keppel will likely wind up like NOL sold to foreigners. Government scholars are useless running commercial companies. NOL was run by ex Chief of Defense Force Ng Yat Chung boss (now at SPH) to the ground then sold to a foreign company CMA CGM Group and it quickly became profitable.

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  • goh:

    these so called scholars are good for nothing. They cant perform globally with the rest. Its a waste of taxpayers money to fund their education. Period.

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  • Harder Truths:

    Just like Sembawang Corp selling to Punjab Lloyd. When the ex-scholars could not make things work they sell off and run away.

    Most likely assets will be sold to to a FOREIGN CORPORATION again. Because these have REAL WORLD managers. Not ex-SG military Action Man figures (balls sold separately).

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  • oxygen:

    KEPPEL CORP 2018 ANNUAL REPORT promises “transforming to deliver”. It is now 2020 heading fast into 2021. It is unclear what “transformation” took place or taking place in the last 22 months.

    And if it is selling out Keppel O & M and its property arm to rebalance its balance sheet gearing sustainability, I can’t comprehend how “selling out” will achieve its 2019 Annual Report promises of “Forward Together”

    A cryptic mind might read those messages are Orwellian irony.

    Anyway, who wants to buy an offshore marine business that is relatively uncompetitive to South Korean and Chinese rivals – the latter build and repair whilst Keppel Corp is repair except its rig building sector. Both Chinese/Korean marine sector gain engineering/management skills unsurpassed by others who merely repair.

    Rig building is a FEAST AND FAMINE business – a brief quick feast of demand for rigs in offshore oil and gas structure and a LONG FAMINE after that because offshore oil and gas development takes years of construction development -ignoring the fact that rig fabrication takes years itself.

    Fossil fuel is out of favor. Who is buying a sunset industry which is also dawning OF DECLINE in the commercial property sector which Keppel Corp needs to restructure urgently?

    HERE IS THE LATEST HOT NEWS on the commercial property front.

    Google abandoning a new Dublin office signals change for the commercial property markets

    https://www.cnbc.com/2020/10/02/google-abandoning-a-new-dublin-office-signals-change.html

    Has Keppel Corp missed the boat since 2018 promise of “transformation to deliver”?

    And too late in the post Covid-19 pandemic to parachute out to safe landing?

    Go figure.

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  • John Grosse:

    IT’S A WRONG DECISION! Check the history of the rig building industry before you make stupid panic decisions.
    Before the pandemic, there was already a fall in oil prices. With the pandemic, all business world wide took a plunge .Nothing new.
    The stigma of “sunset industry”, first promulgated in the 1950s has been debunked.
    After 1973, after oil prices plunged, KeppelFels (it’s name at the time), stuck to this so called “sunset industry”, and made a crucial move to buy two rig designs from and American company, costing several US millions!
    As a result, it became the biggest rig building shipyard in the world, beating Korean, Japan and China shipyards!

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  • oxygen:

    IN THE OIL AND GAS SECTOR, from discovery to final investment decision (FID) to “first oil/gas” production, it takes 10 to 20 years of smooth development milestone.

    FID is not a simple financing decision. For oil, it is economic and for gas, a big input consideration is political (domestic wants cheap gas for household and transportation energy in priority). For rig builders who missed the feast, it is therefore a LONG LONG STARVATION of hunger waiting.

    Not a surprise to me that all those major onshore/offshore big discoveries in the past decade seen no FID of construction development to first revenue generation.

    https://www.sciencedirect.com/science/article/pii/S2468256X19300033

    The marine infrastructural sector like Keppel O & M needs either a strong balance sheet ( it does NOT and on the contrary instead) or a big order book in the pipeline to sustain operation through these hard times.

    Covid 19 pandemic makes the HARD TIMES A LOT HARDER and financial distress FAR MORE STRESSFUL to sustain.

    A merger between Sembawang and Keppel Corp (accompanied by massive retrenchment) may be on the card supplemented by a big capital raising exercise might be its only and best option instead of selling out in a difficult economic environment forecast to stay for this coming decade.

    That means dilution of forward earnings per share and a big mark down of its share valuation.

    Is Keppel Corp and Sembawang ready for this bitter pill to swallow?

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  • Soccerbetting2:

    Reported on Straits Times :Quote -”Goh Jin Hian sued by Inter-Pacific Petroleum’s judicial managers over US$156 million in losses
    Dr Goh, 52, was a director at Inter-Pacific Petroleum from June 28, 2011, to Aug 20, 2019.
    Dr Goh, 52, was a director at Inter-Pacific Petroleum from June 28, 2011, to Aug 20, 2019.PHOTO: ST FILE
    PUBLISHED2 HOURS AGO
    FACEBOOKWHATSAPPTWITTER
    Grace LeongBusiness Correspondent
    SINGAPORE – The judicial managers of insolvent marine fuels supplier Inter-Pacific Petroleum (IPP) have sued the company’s former director, Dr Goh Jin Hian, over US$156 million (S$212.6 million) in losses it sustained due to his alleged breach of director’s duties, according to court documents seen by The Straits Times.

    The suit against Dr Goh, who is the son of former prime minister Goh Chok Tong, was filed late last Friday night (Oct 2) in Singapore’s High Court by LVM Law Chambers, which represents Deloitte & Touche, IPP’s judicial managers…..”Unquote .

    Response : US156 millions ??? Is this sum peanuts to somebody beast mother ?

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  • John Grosse:

    @ oxygen:
    October 4, 2020 at 10:54 pm (Quote)

    Shipyards are quite different from oil amd gas industry.

    Building oil rigs is just one aspect of a shipyard’s
    business. That is why it’s called “ship-yard”! Ships are employed worldwide. They need to be built, repaired, renovated and serviced.

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  • oxygen:

    @ John Grosse

    Rigs building is FEAST AND LONG FAMINE business but it is marine just like shipyard and ship-repair of all sizes.

    IF SHIPYARD IS QUITE DIFFERENT of economic cycles AND SPACE as you asserted, how do you explain these

    - Keppel O & M was bleeding for the last 5 years until a token profit in 2019 (when its Brazilian oil rigs business have been in deep distress for much longer prior?

    - and secondly, why did Keppel Corp talked of “transformation to deliver” ( can’t see any) in its 2018 Annual Report and in 2019 promises “forward together” (no need to restructure??) disregarding its stretched financial position.

    I assert that energy business is economic sensitive and globally we are in a hard times forward. Cheasapeake Energy filed for Chapter 11 protection. and read this

    The U.S. shale-oil industry may collapse, new report says, after Goldman warns crude is set for a fall

    https://www.marketwatch.com/story/the-us-shale-oil-industry-may-collapse-new-report-says-after-goldman-warns-crude-is-set-for-a-fall-2020-06-10

    These are signs of global distress and Keppel is trapped in financial stress needing to transform its asset base and balance sheet.

    I gather a lot of Singapore listed offshore marine support business have gone under. Is that true or not?

    And this morning, I saw this news read -

    Gold, equities struggle to find a direction

    https://www.kitco.com/commentaries/2020-10-05/Gold-equities-struggle-to-find-a-direction.html

    And US dollar is falling and corporate long-term bond yield rising! But base metals (economy sensitive) is falling.

    What is clear one day is a muddled mess the next as the writer in Kitco.com warned.

    John Grosse: Shipyards are quite different from oil amd gas industry.

    Building oil rigs is just one aspect of a shipyard’s
    business. That is why it’s called “ship-yard”! Ships are employed worldwide. They need to be built, repaired, renovated and serviced.

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  • xoxo:

    well,SHIPyards or SHIT-yards,ALL THEIR OVERSEAS FORAY$ ARE $SHITS!!!!

    THE TLCs and OTHER GLCs are ONLY GOOD AT MONOPOLISING THE LOCAL MARKETS from SUPERMARTS TO LOTTERY TO TELCOMS TO ELECT AND WATER AND EVEN INSURANCE AND HEALTH AND HOUSING N RENTAL BUSINESS???

    ELSE,WHAT DO THEY EXCEL AT IF NOT SUCKING MONEY OUT OF sgs????
    even their BANKNIG IS CRAP,ONLY GOOD AT SUCKING from DOMESTIC MARKETS ???

    TELL DBS BANK TO SEGREGATE OVERSEAS NETT PROFITS FROM DOMESTIC?
    SEE THE REAL PERFORMANCE AS LOCAL IS FRANCHI$ED AND MONOPOLISED????

    GUPTA CEO,CRAP MAN!

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  • Another opinion:

    Keppel is a puppy:
    Keppel’s shipyard and rig business cannot compete with Korean and Chinese companies in the same business. This should have been clear years ago when Keppel had to pay a bribe to get business. It got caught in Brazil and had to pay a huge fine US$500+m. Over the last few years only its property business is making money and it redevelop the land previously used by the shipyard. Temasek wanted to merge Keppel and Sembawang but this was called off after the sharp drop in Keppel share price.

    Keppel will likely wind up like NOL sold to foreigners. Government scholars are useless running commercial companies. NOL was run by ex Chief of Defense Force Ng Yat Chung boss (now at SPH) to the ground then sold to a foreign company CMA CGM Group and it quickly became profitable.

    Singapore former PM GCT said Keppel Corp and SembMarine were top 2 state of the art rig builders in the world!

    PAP would allow Keppel Corp to move its shipyards overseas, and develop the land Keppel owns. Imagine how much Keppel could reap, look at the billons Keppel made in Reflection at the Bay.

    PAP of course will stop or reduce land sale for other private developers as the shipyard lands of Keppel and SembMarine can yield tens of thousands of condo units.

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  • Dont worry,Keppel Shareholders:

    Temasek will go all out to help Keppel socialize losses, privatise profits, just like SembCorp Industries and SembCorp Marine.
    Sleep well.
    After all, if Keppel share price of Keppel goes up, it will boost Temasek’s performance.

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  • John Gross:

    @ oxygen:
    October 6, 2020 at 8:15 am (Quote)

    - Keppel O & M was bleeding for the last 5 years until a token profit in 2019 (when its Brazilian oil rigs business have been in deep distress for much longer prior?

    Answer: Keppel has been in boom and bust since 1973. Nothing new!

    - and secondly, why did Keppel Corp talked of “transformation to deliver” ( can’t see any) in its 2018 Annual Report and in 2019 promises “forward together” (no need to restructure??) disregarding its stretched financial position.

    Answer: What’s wrong with that? It’s just corporate talk! Everybody is talking about innovation, sustainability, and the like. It’s just pep talk!

    I assert that energy business is economic sensitive and globally we are in a hard times forward. Cheasapeake Energy filed for Chapter 11 protection. and read this
    Answer: Shipyards are not in the energy business.

    he U.S. shale-oil industry may collapse, new report says, after Goldman warns crude is set for a fall

    Answer: Shipyards are not in the energy business.

    https://www.marketwatch.com/story/the-us-shale-oil-industry-may-collapse-new-report-says-after-goldman-warns-crude-is-set-for-a-fall-2020-06-10

    Answer: Shipyards are not in the energy business.

    These are signs of global distress and Keppel is trapped in financial stress needing to transform its asset base and balance sheet.

    Answer: It’s the Pandemic! Everybody is in such situation. has lost 70% of it’s business!

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  • oxygen:

    @ John Grosse

    Have you seen Keppel in boom cycle and Keppel Fels (then) in bust cycle together. They are in the same industry!

    John Gross: Answer: Keppel has been in boom and bust since 1973. Nothing new

    This one got my toe giggling, though not sure if it was ignorance and just carelessness.

    John Gross: Answer: What’s wrong with that? It’s just corporate talk! Everybody is talking about innovation, sustainability, and the like. It’s just pep talk!

    Annual report is a legal document of financial statement signed by Chairman of the Board of Director of particular date to present a “true and fair” views of the state of affair of any listed entity, not just Keppel, and financial statements therein is audited. Any disclosure statement therein or attached has fiduciary obligation. So I am puzzle why you call it pep talk or corporate talk when I read annual report from front page to last page – the front page is mind orientation of what to expect of its internal content.

    John Gross: Answer: Shipyards are not in the energy business.

    You stand too close staring at the tree trunk not knowing the forest enclosing you. Of course shipyard is NOT energy business. Energy consumption drives global economy. When energy demand tapers off in down cycle, the global economy is weak, productions and shipment of raw materials, final goods slow and hence DEMAND FOR ALL SHIP TRANSPORTATION AND shipyard services will be adversely affected.

    John Gross: Answer: It’s the Pandemic! Everybody is in such situation. has lost 70% of it’s business!

    Yes, pandemic hurts everybody to varying degrees but Keppel balance sheet is IN STRESS. Huge billion of borrowing is due in current liabilites (i.e. due within the next financial/accounting cycle) and more thereafter. The debt due have to be restructured or re-negotiated on new terms factoring risks evaluations from its lending bankers. If Keppel is unable to unload some of its key assets in distressed environment, a major capital call will be necessary. And that means dilution for shareholders. Failing that, is Keppel Corp going under? I don’t know.

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  • oxygen:

    @ John Grosse

    SIGNS OF THE HARD TIMES ahead. Cash-rich Exxonmobile, the world largest oil business is unloading 11% of its European workforce.

    Hot from the printing press..

    Exxon to lay off up to 1,600 workers in Europe

    https://www.marketwatch.com/story/exxon-to-lay-off-up-to-1600-workers-in-europe-2020-10-05

    and this is parallel to Goldman Sach warnings

    oxygen: The U.S. shale-oil industry may collapse, new report says, after Goldman warns crude is set for a fall

    https://www.marketwatch.com/story/the-us-shale-oil-industry-may-collapse-new-report-says-after-goldman-warns-crude-is-set-for-a-fall-2020-06-10

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  • John Grosse:

    @ oxygen:
    October 6, 2020 at 8:45 pm (Quote)

    This one got my toe giggling, though not sure if it was ignorance and just carelessness.

    Is that all you have?

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  • oxygen:

    @ John Grosse

    Your quote back to me below has one of my typo error.

    John Grosse: This one got my toe giggling, though not sure if it was ignorance and just carelessness.

    it should have been correctly read IN CONTEXT of your failed ignorance/carelessness of achievement in interpretation and use of annual reports as

    John Grosse: This one got my toe giggling, though not sure if it was YOUR ignorance and just carelessness.

    Your cognitive skills is found wanting again.

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  • John Grosse:

    @ oxygen:
    October 7, 2020 at 5:22 pm (Quote)
    Your cognitive skills is found wanting again.

    For all your predictions of doom and laughing toes,
    Keppel O & M just announced landing a $600 million offshore contract.

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  • John Grosse:

    Oxygen: Add this to your cognitive skill!
    SIA has just gone into to food delivery business. Beware Foodpanda, Grab Food, Deliveroo!

    More than 900 SIA A-380 lunches sold out in half an hour

    https://www.straitstimes.com/singapore/more-than-900-sia-a-380-lunches-sold-out-in-half-an-hour

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