Keppel Corp Shares Buy Or Not To Buy? Down 😢 After Temasek Drops Bid!

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Oct 2019 Temasek made a partial offer for #keppelcorp shares. It was a premium but it had Material adverse clause (MAC) attached to it.

In 1Q2020, Keppel Corp recorded $160m profit. But along came COVID-19. Oil prices crashed to $20 per barrel when it was steady around the $50 mark for a few years.

In 2Q2020, Keppel Corp then reported a $698m loss because of a $930m writedown of asset.

Section1: Write off’s for keppel corp’s assets. Assets were stranded and contracts were cancelled. With a Value In Use (VIU) model, keppel had a major write down. Keppel Corp’s subsidiary FLOATEL also recorded a major write off which was $220m.

Section2: Keppel Corp used to be known as a Oil and Gas player building world class offshore rigs. But moving forward, it would be a mistake to associate it to them Their 4 business units 1) Offshore marine 2) Investments (Including M1 privatised at $1.91B) 3) Property (Including Keppel Land privatised at $3.6B) 4) Infrastructure (including Keppel T&T, Keppel DC Reit, Keppel Infrastructure)

Section 3: M1 is estimated at only $73m in profit/year. In my opinion, Keppel corp is a turnaround play. They will transition for many years and infrastructure will eventually be the CROWN JEWEL with its energy solutions and infrastructure assets.

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