Keppel Infrastructure raises $357m

The listed infrastructure trust, now Singapore’s largest, is expected to reach $3bn in assets under management after completing the acquisition of a 1.3GW power plant later this year.

Keppel Infrastructure Trust (KIT), the result of a merger between Keppel Infrastructure Trust (KIT) and City Infrastructure Trust (CIT), last week commenced trading on the Singapore Exchange after completing the acquisition of the Senoko Waste-to-Energy (WTE) Plant, Keppel Seghers Tuas WTE Plant and Keppel Seghers NEWater Plant.

The enlarged KIT, in which Keppel Corporation holds the lion’s share, now ranks as the largest Singapore infrastructure-focused business trust listed on the Singapore Exchange.

The company raised S$525 million (€357 million; $389 million) through a private placement and preferential offering, the proceeds of which were earmarked to finance the purchase of a 51 percent stake in the Keppel Merlimau Cogen (KMC), a 1.3-gigawatt gas-fired power plant located in Singapore.

The private placement issue price has been fixed at S$0.52 per placement unit, a discount of 6.15 per cent to the adjusted volume-weighted average price. The transaction was more than twice subscribed, the company said in a statement.

Following the KMC acquisition, which is expected to complete by the third quarter of this year, KIT will have more than S$4 billion of assets under management.

“With an enlarged and diversified portfolio, Keppel Infrastructure Trust's ability to offer investors long-term, predictable and sustainable returns is enhanced. Furthermore, with the transactions, the Trust has grown significantly in scale and size, which will strengthen its ability to pursue more meaningful growth opportunities,” said Khor Un-Hun, chief executive of Keppel Infrastructure Fund Management.

Keppel Infrastructure Fund Management last week also announced the appointment of Daniel Cuthbert Ee Hock Huat, who was previously chairman of CitySpring Infrastructure Management (CSIM) – the former Trustee-Manager of CIT – as an independent director.

Prior to his chairmanship at CitySpring Infrastructure Management, Ee was chairman of Gas Supply from 2002 to July 2010 and sat on the board of the National Environment Agency from 2006 to March 2012. He was also a member of the Corporate Governance Council from February 2010 until its dissolution in May 2012, and served as chief executive of Standard Chartered Merchant Bank Asia from 1996 to 1999.

He now sits on the board of Citibank Singapore and is the deputy chairman of the Securities Industry Council. He is also a fellow and council member of the Singapore Institute of Directors.

“With greater scale and critical mass, the combined trust will be able to better access the capital markets to pursue meaningful growth opportunities in the future. Such future growth opportunities could include assets incubated by [Keppel Infrastructure] in addition to other infrastructure assets that meet our investment criteria,” said Tong Yew Heng, chief executive of CSIM.