Keppel Corp has said it may look to offload or merge its offshore and marine business as part of a strategic review announced late Tuesday.
The Singapore-listed conglomerate said the review of the division comes amid the sector’s challenging environment and will explore both “organic and inorganic options”.
Organic options include reviewing the strategy and business model of Keppel Offshore & Marine, assessing its current capacity and global network of yards and restructuring to seek opportunities as a developer of renewable energy assets; while inorganic options would range from strategic mergers to disposal.
Keppel, which is looking to adopt an increased asset-light business model, said it had “identified assets” that can potentially be monetised over time and channeled towards growth initiatives.
These include rigs owned by Keppel Offshore & Marine which were described as “non-core assests”, but not fixed assets such as shipyards, the company said.
The plans are part of Keppel's 10-year strategy that it had flagged earlier this year to refocus its portfolio to energy and environment, urban development, connectivity and asset management.
“Keppel is well placed to weather the challenging environment and chart our growth path,” said Keppel chief executive Loh Chin Hua.
“As we execute our long term plans and build growth engines for the future, we will also seek to realise the group’s current potential by unlocking about SGD 3-5bn ($2.2-3.65bn) of our monetisable assets over the next three years, which will be redeployed to seize new opportunities and improve returns.”
Last month Singapore government-backed investor Temasek Holdings backed out of its $3bn bid to take a controlling stake in the rig-builder via a partial offering.
Analysts have long hoped for a consolidation in the rig-building sector through a deal between Keppel's offshore and marine business and rival Sembcorp Marine.
Keppel, whose businesses range from telecommunications to property development, has seen its share price drop over 20% since being left at the alter by Temasek.
