* Identifies S$17.5 bln in assets to monetise
* Exploring all options in O&M strategic review
* Shares rise as much as 6.5% in morning trade
* Citi keeps ‘sell’ rating on Keppel (Update Tuesday’s story, adds analyst comment, share movement)
SINGAPORE, Sept 30 (Reuters) - Singaporean conglomerate Keppel Corp said it had identified assets worth S$17.5 billion ($12.8 billion) for monetisation, including through sales, and started a review of its lossmaking offshore and marine (O&M) business.
Its shares, which have been languishing near a decade low, rose as much as 6.5% in early trade.
The plans unveiled on Tuesday are part of Keppel’s 10-year strategy flagged earlier this year to refocus its portfolio on energy and environment, urban development, connectivity and asset management.
Keppel said it was exploring options including strategic mergers and disposals for its offshore and marine business, which builds oil rigs and has been battered by falling energy prices.
Keppel said the assets, such as some of its landbank and investment properties, it has identified to potentially monetise over time have a total value of about S$17.5 billion.
“Over the next three years, we plan to monetise about S$3-S$5 billion of the assets from this substantial S$17.5 billion base to seize new opportunities that can help us achieve our desired returns,” CEO Loh Chin Hua said.
The conglomerate, whose businesses range from telecommunications to property development, was also moving “to eliminate the gap between our share price and the sum of the parts valuation”, he said.
Its shares have fallen more than 17% since August when state investor Temasek Holdings abandoned its $3 billion offer to raise its stake in Keppel to a majority holding after the company reported weak results.
Analysts have long hoped for a consolidation in the rig-building sector through a deal between Keppel’s O&M business and smaller rival Sembcorp Marine, also backed by Temasek. Keppel’s plans failed to impress some analysts.
“Details remain scarce at this point with a strategic review outcome some distance away (estimated to be within a year), while volatile market conditions provide an uncertain backdrop for asset monetisation moves,” said Citi analyst Kwok Wei Chang, maintaining a ‘sell’ rating on Keppel.
“In the meantime, near-term fundamentals remain challenging, particularly for O&M,” he said.
$1 = 1.3698 Singapore dollars Reporting by Aradhana Aravindan; Additional reporting by Anshuman Daga; Editing by Jason Neely, Louise Heavens and Muralikumar Anantharaman