Responses to shareholders on substantial and relevant questions raised for Keppel

Corporation's Extraordinary General Meeting

Singapore, 9 December 2021 - Keppel Corporation Limited ("Keppel" and the "Company") would like to thank shareholders for submitting questions ahead of the Company's Extraordinary General Meeting (EGM) to be held by electronic means on Thursday, 9 December 2021 at 10.30 a.m. (Singapore Time).

Due to overlaps in several of the questions received, the Company will not be providing responses to every question. Instead, responses to substantial and relevant questions have been set out via the following topics:

  1. Keppel's Strategy & Vision 2030
  2. Proposed Acquisition of SPH
  3. SPH REIT
  4. Others

Please refer to the Company's responses set out in Appendix 1.

By Order of the Board

Caroline Chang/Kenny Lee

Company Secretaries

9 December 2021

Disclaimer

These responses are for information purposes only and do not have regard to your specific investment objectives, financial situation or your particular needs. Any information in these responses is not to be construed as investment or financial advice and does not constitute an invitation, offer or solicitation of any offer to acquire, purchase or subscribe for shares in Keppel. The past performance of Keppel is not indicative of the future performance of Keppel.

Certain statements in these responses may constitute "forward-looking statements", including forward-looking financial information. Such forward-looking statements and financial information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Keppel or industry results, to be materially different from any future results, performance or achievements, expressed or implied by such forward-looking statements and financial information. Such forward-looking statements and financial information are based on numerous assumptions regarding Keppel's present and future business strategies and the environment in which Keppel will operate in the future. Actual future performance, outcomes and results may differ materially from these forward-looking statements and financial information. As these statements and financial information reflect management's current views concerning future events, these statements

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and financial information necessarily involve risks, uncertainties and assumptions. These forward-looking statements speak only as at the date of these responses. No assurance can be given that future events will occur, that projections will be achieved, or that assumptions are correct.

Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from similar developments, changes in operating expenses (including employee wages, benefits and training costs), property expenses and governmental and public policy changes. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the current view of management regarding future events. No representation or warranty express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Neither Keppel nor any of its affiliates or representatives or the advisers of Keppel Pegasus Pte. Ltd. (including J.P. Morgan) shall have any liability whatsoever for any loss howsoever arising, whether directly or indirectly, from any use of, reliance on or distribution of these responses or its contents or otherwise arising in connection with these responses. None of Keppel nor its affiliates or representatives or the advisers of Keppel Pegasus Pte. Ltd. (including J.P. Morgan) undertakes any obligation to update publicly or revise any forward-looking statements.

The information and opinions contained in these responses are subject to change without notice.

The response is qualified in its entirety by, and should be read in conjunction with, the full text of the joint announcements released by SPH and Keppel Pegasus Pte. Ltd. on 2 August 2021 and 9 November 2021 (the "Joint Announcements") and the Circular despatched by Keppel to its shareholders on 24 November 2021 (the "Circular"). In the event of any inconsistency or conflict between the Joint Announcements and the Circular on one hand and the information contained in these responses on the other, the Joint Announcements and the Circular shall prevail. All capitalised terms not defined in these responses shall have the meanings ascribed to them in the Joint Announcements and the Circular.

Responsibility Statement

The directors of Keppel (including those who may have delegated detailed supervision of these responses) have taken all reasonable care to ensure that the facts stated and opinions expressed in these responses which relate to Keppel (excluding information relating to SPH, SPH REIT and Keppel REIT (save for Keppel's unitholding interest in Keppel REIT)) are fair and accurate and that there are no other material facts not contained in these responses, the omission of which would make any statement in these responses misleading. The directors of Keppel jointly and severally accept responsibility accordingly.

Where any information has been extracted or reproduced from published or otherwise publicly available sources or obtained from SPH, the sole responsibility of the directors of Keppel has been to ensure through reasonable enquiries that such information is accurately extracted from such sources or, as the case may be, reflected or reproduced in these responses. The directors of Keppel do not accept any responsibility for any information relating to SPH, SPH REIT and Keppel REIT (save for Keppel's unitholding interest in Keppel REIT).

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Appendix 1

KEPPEL'S STRATEGY & VISION 2030

S/N

Question

Response

1

How does the

The proposed acquisition of SPH is very much in line with

proposed SPH

Keppel's Vision 2030, where we seek to grow Keppel's

acquisition fit in with

business as a provider of solutions for sustainable

Keppel's strategy

urbanisation through organic and inorganic options.

and Vision 2030?

SPH possesses a quality portfolio of businesses and assets

Can you elaborate

which are strongly aligned with Keppel's business and will

on the synergies

complement and strengthen three out of Keppel's four focus

between Keppel &

areas, namely Urban Development, Connectivity and Asset

SPH?

Management. These include SPH's businesses and assets

such as Purpose-built Student Accommodation (PBSA),

senior living, stakes in SPH REIT and its REIT manager as

well as other development assets.

The proposed acquisition of SPH would also allow Keppel to

consolidate its existing ownership of M1 and the Genting

Lane data centre asset, which are currently jointly owned.

Keppel is uniquely positioned to enhance and unlock the

value of SPH's assets and operations by harnessing the

synergies of the larger Keppel ecosystem, including

leveraging Keppel Capital as a platform for capital recycling

and tapping third-party funds for growth.

The acquisition of SPH will complement Keppel Land's plans

to move beyond a traditional developer model to providing

urban development solutions. It would also accelerate

Keppel's expansion into the highly resilient and fast-growing

student accommodation and senior living sectors, where SPH

has established a strong track record and presence.

Keppel Capital's pro forma assets under management (AUM)

can potentially grow by about 27% from about S$37 billion as

at end-2020 to around S$47 billion following the acquisition,

through the addition of SPH REIT's AUM, PBSA, senior living

and other assets. This is expected to further enhance the

asset management platform under Keppel Capital, improving

the diversity of its asset classes, as well as increasing

recurring fee-based and investment income.

In addition, the proposed transaction would allow Keppel to

acquire a strategic stake in SPH REIT and full ownership of

its REIT manager, which will provide a retail-focused vehicle

to augment Keppel Capital's stable of offerings and provide a

natural platform for the recycling of Keppel's retail assets.

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2

Are you able to

We are unable to provide a forecast of revenue and cost

quantify the

savings arising from the proposed transaction.

estimated synergy

with SPH in terms of

However, we have disclosed that if the transaction is

revenue and cost

successful:

savings from the

acquisition? Will the

It would be accretive to Earnings per Share (EPS) on a

acquisition be

pro-forma basis.1, 2

earnings accretive?

The pro-forma contribution from recurring income to

Keppel's total PATMI would increase from 51% to 56%.1,3

3

How does the

The proposed acquisition of SPH fits in well with Keppel's

acquisition of SPH

capital recycling model as many of SPH's assets, including

tie in with Keppel's

real estate, are stabilised and well-suited for recycling.

strategy to be asset

light?

The SPH portfolio will provide a ready and sizeable pool of

assets that can feed into Keppel's Asset Management

business, most of which are ready for monetisation either

immediately or within the next three years. For instance, the

PBSA portfolio can potentially be put into a REIT or

securitised through private equity funds. This will also allow

us to create more fee income opportunities and enjoy

valuation upside as we execute our recycling plan.

We will also explore the monetisation of certain non-core

assets and liquid investments which may not fit in Keppel's

strategy.

  1. This statement on growth in earnings per share ("EPS") and recurring income contribution is not intended as a profit forecast and should not be construed as such. This statement should not be interpreted to mean that its value in any future financial period will necessarily be greater than those for the relevant preceding financial period. In computing the financial impact of the Proposed Transaction on pro forma EPS, financial statements for different financial year ends and different financial years were used (being the financial year ended 31 Dec 2020 for the Group and the financial year ended 31 Aug 2021 for the SPH Group). In computing the financial impact of the Proposed Transaction on pro forma recurring income contribution, financial statements with different half year ends were used (being 30 Jun 2021 for the Group and 28 Feb 2021 for the SPH Group).
  2. Based on (a) Keppel's audited consolidated results for the financial year ended 31 Dec 2020, (b) the SPH FY2021 Results (for the financial year ended 31 Aug 2021) and (c) pro-forma financial effects of the DIS on selected financial measures of SPH set out in Appendix B to the Circular, yielding a decrease in loss per share of 3.9 Singapore cents excluding one-off effects due to gains arising from the change in interest in Keppel REIT held by Keppel and excluding restructuring adjustments which include the effect of the assumption of certain liabilities, costs and expenses arising from the Media Business Restructuring.
  3. Profit after tax and non-controlling interests ("PATMI"), recurring income excludes gain arising from the change in interest in Keppel REIT held by the Group and finance costs to be incurred due to cash consideration used to fund the transaction.

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4

With the

We are unable to comment on share price movements, which

acceleration of

can be affected by many different factors.

Vision 2030, when

can shareholders

We believe that when we achieve our Vision 2030 goals,

see a sustained

Keppel will be a valuable company and powerhouse of

improvement in

solutions of sustainable urbanisation with a strong growth

Keppel's share

trajectory, delivering strong returns, steady recurring income

price?

and good dividends.

We have also said that given the good progress achieved to

date, we are confident of achieving most of our Vision 2030

targets by 2025.

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How does SPH's

Keppel has an established portfolio of commercial assets

retail assets and

including quality retail assets in Singapore and other parts of

operations fit in with

Asia, such as China and Vietnam.

Keppel's Vision

2030? Is Keppel is

With the proposed acquisition of SPH, Keppel will have an

looking to expand

opportunity to broaden its exposure to the retail sector,

into the retail

including through SPH REIT's portfolio, and potentially benefit

property sector?

from the recovery in the retail sector as market conditions

improve post-pandemic.

The addition of SPH REIT's AUM, amongst other assets, will

also enhance the asset management platform under Keppel

Capital, improving the diversity of its asset classes,

increasing recurring fee-based and investment income as

well as providing a natural platform for the recycling of

Keppel's retail assets.

PROPOSED ACQUISITION OF SPH

S/N

Question

Response

6

Why did Keppel

We continue to hold the view that SPH is a strategic

raise the offer price?

opportunity for Keppel to acquire a quality platform that is

strongly aligned and complementary to Keppel's business

How was the revised

model and capabilities.

offer price derived?

At the Final Consideration, the proposed transaction remains

Given that you have

attractive and earnings accretive on a pro forma basis for

raised the price for

Keppel.

this transaction, is

this still as attractive

We have taken into account the following developments

an investment for

since the initial offer in August 2021 when deciding to

Keppel?

increase the offer:

Global economic conditions have continued to

strengthen; SPH's performance improved as disclosed at

its full year results briefing; and additional synergies

between Keppel and SPH have been identified, allowing

Keppel to make a higher offer for SPH's portfolio.

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Keppel Corporation Ltd. published this content on 09 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 December 2021 10:11:01 UTC.