Keppel Corp, Keppel Asia Infrastructure Fund (KAIF) and a co-investor of the fund, are set to acquire 51% of the issued share capital in Cleantech Renewable Assets.
The acquisition will be made from Cleantech Energy Corporation, through Cloud Alpha at a consideration price of US$130 million ($177.7 million).
The earn out payments – which are subject to the attainment performance milestones – will not exceed US$20 million. The sum of these payments would amount to the consideration payable, Keppel Corp explains in a Dec 13 regulatory filing.
The remaining 49% of the equity interest in Cleantech will be held by Shell, its existing shareholder.
The consideration was reached at “on a willing-buyer and willing-seller basis” after negotiations that took into account the strategic merits, prevailing market conditions and the development pipeline and platform value of Cleantech Renewable Assets.
As at Jun 30, the shares carried a book value and net asset value of US$44.15 million. Keppel Corp says it will satisfy its share of the consideration – of up to US$90 million – in cash, using internal resources.
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Keppel Corp has an indirect stake in Cloud Alpha, for 60% of the share capital in the company is held by its wholly-owned subsidiary Keppel Renewable Investments. The remaining 40% in Cloud Alpha is held indirectly by KAIF and its co-investor.
Keppel Corp stresses that the transaction is not expected to have any material impact on its net tangible assets per share or earnings per share for its FY2021 ending on Dec 30.
Completion of the transaction is expected in 1Q2022, subject to and conditional upon certain customary conditions including regulatory and other approvals.
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Headquartered in Singapore, Cleantech is a solar energy platform that focuses on the commercial and industrial segment. That company has a total capacity of over 600 MegaWatts across the various stages of operations, construction and development.
Its assets are located across India, Thailand, Malaysia, Singapore, Indonesia, Cambodia and Vietnam.
Cleantech has around 120 credit-worthy and top tier customers, 95% of whom are spread across five energy intensive sectors including auto, industrial, consumer and retail, energy and chemicals, and textile.
Companies it counts as customers include Apollo Tyres, Cargill, Coca Cola, Shell Lubricants, Akzo Nobel, Kerry Ingredients and Kuehne + Nagel.
Going forward, it is looking to achieve a cumulative generation capacity of 3 GigaWatts over the next five years. This comes as it expects to benefit from the growing demand for renewable energy as customers put forth Net Zero targets.
“The investment in Cleantech reflects Keppel’s commitment to sustainability and our vision 2030 plans to grow our renewables business” says Loh Chin Hua, CEO of Keppel Corp.
Keppel is looking leverage on Cleantech’s expertise in solar energy projects and seek out opportunities for collaboration with other parts of the Keppel Group so it is better able to achieve its target of having 7 GigaWatts of renewable energy assets by 2030,” he adds.
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Interestingly, the investment in Cleantech marks KAIF’s first in the renewable energy space.
KAIF is managed by a private fund manager under Keppel Capital. Launched in January 2020, the KAIF partnership and its co-investment vehicles have aggregate commitments of around US$1 billion from global institutional investors.
The fund counts Keppel Corp directors Loh Chin Hua, Till Vestring and Veronica Eng, as investors.
Shares in Keppel Corp closed down 6 cents or 1.15% at $5.18 on Dec 13, before the announcement.
Cover image: file photo
