During a Sias session with investors, Kevin Neo, CEO of KIT’s trustee-manager, justified the GMG’s valuation. The independent financial adviser PrimePartners had “analysed the valuation of GMG based on the implied EV/Ebitda ratio of GMG, which at 6.7 times is within the range of the EV/Ebitda ratios of the comparable companies, and lower than both the mean and median EV/Ebitda ratios of 7.3 times and 8.0 times, respectively. In addition, the implied P/E ratio of GMG of 9.8 times is within the range of the P/E ratios of the comparable companies and lower than both the mean and median P/E ratios of 13.8 times and 11.4 times, respectively,” Neo said.
Keppel Infrastructure Trust (KIT) is at the centre of a debate between activist investors and its efforts to secure a stake in the subsea cable value chain. Corporate Monitor, an independent research entity that counts corporate governance expert Mak Yuen Teen as a founder and director, has argued against KIT’s unitholders voting in favour of resolutions 1 and 2 at an extraordinary general meeting held on Nov 11.
Resolution 1 was a vote on the acquisition of a 46.7% stake in Global Marine Group (GMG) for $119.2 million and equity commitment for $68.4 million to support GMG’s growth plans. Resolution 2 is for the approval of raising $130 million in one or more tranches in five years to support GMG’s further growth and for working capital.
