An extraordinary general meeting for the proposed deal will be held on Nov 11

 

[SINGAPORE] Keppel Infrastructure Trust (KIT) is deepening its push into the digital infrastructure segment, identifying this industry as an area it wants more exposure to.

 

This move was driven by the &ldquo strong tailwind&rdquo behind this particular industry, said KIT trustee-manager&rsquo s chief executive Kevin Neo at a dialogue with the Securities Investors Association Singapore (Sias) on Oct 30.

 

The transcript of the session was made available in a bourse filing on Saturday (Nov 1).

 

The comments came as KIT marked its first foray into the segment with its proposed S$119 million acquisition   of Global Marine Group (GMG), a subsea cable maintenance and installation vessel operator. 

 

This deal, which was first announced in April, represents an interest of about 46.7 per cent in the group.

 

According to the transcript, the acquisition will be funded through a combination of internal funds and debt, with no equity fundraising required.

 

KIT will redeploy divestment proceeds from Philippine Coastal Storage and Pipeline Corporation (PCSPC) and the sale of a partial stake in Ventura, said Raymond Bay, chief financial officer of KIT&rsquo s trustee-manager.

 

The transaction is expected to be accretive to distributions per unit (DPU), with a 4.6 per cent DPU accretion on a pro forma basis rising to 6 per cent upon future capital injection.

 

GMG operates specialised vessels that maintain and install subsea fibre optic cables. The company holds a 31 per cent market share in the maintenance market, and 20 per cent in the installation market globally.

 

The business model provides stable cash flows through long-term maintenance zone contracts of five to seven years, and charter contracts of two to four years on a take-or-pay basis. 

 

&ldquo These contracts provide for defined annual payments regardless of actual vessel utilisation, leading to high visibility on cashflows and stability,&rdquo Neo said.

 

GMG&rsquo s contracts also include pass-through provisions for operational costs such as fuel and consumables, protecting the business against cost inflation. &ldquo Even if the vessels are not used, we will get paid,&rdquo Neo added.

 

The acquisition values GMG at an implied enterprise value-to-earnings before interest, taxes, depreciation and amortisation ratio of 6.7 times, below both the mean and median ratios of comparable companies at 7.3 times and 8 times, respectively.

 

In addition, GMG&rsquo s implied price to equity ratio of 9.8 times is within the range of the ratios of comparable companies and lower than both the median and median ratios of 13.8 times and 11.4 times, respectively.

 

Neo acknowledged operational risks but said GMG&rsquo s experienced management team and well-maintained fleet mitigate concerns about vessel availability. High barriers to entry, with new vessel builds requiring two to four years and significant capital, also reinforce GMG&rsquo s competitive position.

 

&ldquo We are very focused on the fundamentals of KIT&rsquo s portfolio and are committed to creating long-term value for unitholders,&rdquo said Neo.

 

&ldquo We will continue to pursue strategic acquisitions that are aligned with secular growth trends of energy transition, rapid urbanisation and digitalisation.&rdquo

 

An extraordinary general meeting to approve the GMG acquisition will be held on Nov 11.

Its divestment gains of S$49 million come from the sale of its stake in Philippine Coastal and the partial sale of its stake in Ventura Motors

 

[SINGAPORE]   Keppel Infrastructure Trust (KIT)   : A7RU 0% on Tuesday (Oct 28) reported distributable income of S$168.9 million for the first nine months of 2025, up 59.2 per cent from S$106.1 million in the year-ago period. 

 

This was attributed to higher contributions from piped-gas provider City Energy, its industrial-infrastructure business Ixom and Australian bus service business Ventura Motors, and a boost from S$49 million worth of divestment gains, KIT&rsquo s manager said in its third-quarter business update. 

 

It recorded divestment gains of S$21.7 million from its sale of its 50 per cent stake in Philippine Coastal, completed on Mar 20, and of S$27.3 million from its sale of its 24.6 per cent stake in Ventura, completed on Aug 12. 

 

Nine-month distributable income for the energy transition segment fell to S$81.4 million, down 25.9 per cent year on year from S$109.9 million, but was partially offset by higher contributions from City Energy. 

 

The piped-gas provider posted an increase in funds from operations to S$41.1 million for the period, from S$36.4 million previously. It logged higher year-on-year town gas volume and service income and registered fuel cost over-recovery. 

 

Distributable income for the environmental services segment fell 33.9 per cent year on year to S$31.9 million from S$48.2 million, mainly due to the Senoko waste-to-energy plant&rsquo s concession being extended at a lower rate. 

 

The distribution and storage segment posted a surge in distributable income of more than 100 per cent to S$81.5 million from S$29.9 million, due to contributions from Ventura and Ixom. 

 

Ixom posted an increase in funds from operations to S$49 million for the period, from S$30.6 million, amid strong performance due to improved margins at the chemical manufacturing and distribution businesses. 

 

Ventura&rsquo s funds from operations grew year on year to S$12.2 million, from S$8.9 million, amid stable operating performance. The manager noted that this was higher for the nine months of 2025 because the corresponding period for 2024 included only four months of contributions, following the acquisition of Ventura in June 2024.  

 

In terms of capital management, the trust&rsquo s net debt stood at 4.6 times as at Sep 30, compared with 5.1 times as at Dec 31, 2024. 

 

Its net gearing stood at 38 per cent, compared with 40.4 per cent as at end-2024. Interest coverage ratio rose to 13.1 times, from seven times as at December 2024. 

 

Its weighted average cost of debt rose slightly to 4.65 per cent as at September, from 4.51 per cent as at end-December. 

 

As part of its capital recycling strategy, KIT plans to redeploy around S$119 million of divestment proceeds for the proposed acquisition of subsea cable service provider Global Marine Group, marking its entry into digital infrastructure. 

 

The proposed acquisition, announced in April, will help KIT capitalise on global digitalisation growth and is subject to unitholders&rsquo approval at its extraordinary general meeting on Nov 11.

 

The remaining S$182 million of divestment proceeds will be deployed to yield-accretive opportunities, the manager said.