Keppel Corp rumoured to be weighing sale of M1 stake

29 Feb 2016

Rumours are circulating that Keppel Corporation Limited is considering the sale of non-core assets, including its 19.1% in Singapore’s smallest mobile operator by subscribers M1 Limited (M1). Reports from Bloomberg and The Business Times suggest that Keppel Corp has seen the value of its shares slump by more than 40% since the start of 2015, made worse by the potential insolvency of one of its biggest clients – Sete Brasil – prompting it to consider the divestment of certain assets, including M1 and commercial lettings group Keppel REIT which are reportedly worth a combined SGD1.8 billion (USD1.27 billion) to Keppel. In addition, The Motley Fool notes recent comments from Loh Chin Hua, the chief executive of Keppel Corp, vis-a-vis M1, in a recent earnings conference call: ‘The first question is on the potential sale of M1. First of all, there was an earlier question about cash flow. I just want to be very clear. Our cash position is not an issue. We have a very strong balance sheet. In the event we choose to sell something, it’s because we think it’s the right time to sell. We remain ready to take investments as and when we see fit … That’s all I will say on M1. We have said before, M1 is not a core investment for us. But when we sell would depend on many things. In the meantime, we are quite happy with the contribution that M1 is making to Keppel T&T and to the Group.’

Singapore, M1 Limited (M1)