Keppel Limited

[ACTIVIST SPEAKS]

21 June 2020 Clarification of BT article
https://links.sgx.com/FileOpen/KIH%20-%2...eID=619841

Dear Editor,
I refer to the article titled “Impairment for Keppel unit Floatel clouds fate of Temasek's offer” published by
the Business Times on 17 June 2020. Morgan Stanley Asia (Singapore) Pte. is advising Kyanite Investment
Holdings Pte. Ltd. (the “Offeror”) on its voluntary pre-conditional cash partial offer (the “Offer”) for Keppel
Corporation Limited (the “Company”).
The article referred to analyst commentary about the Material Adverse Change (“MAC”) clause in the Offer.
The S$500m threshold for “provision for proceedings” referred to in the article relates only to the total
provisions attributable to any claim, litigation, investigation or proceeding to which a member of the Group
(being the Company and its subsidiaries and associated companies) is subject.
Potential additional accounting impairments of Floatel or KrisEnergy referred to in the article (and any other
accounting impairments that the Company would record) would not be taken into account in determining
whether this threshold is met.
Such accounting impairments would typically affect net asset value and net profit after tax. In this context,
the relevant thresholds by which a MAC could occur as a result of accounting impairments would be the
thresholds for net asset value and for the cumulative net profit after tax but before non-controlling interests
(the “PAT”). This would be based on the Group’s latest available financial statements when all other preconditions have been satisfied (the “Latest Financials”).
Such thresholds include:
(i) If the net asset value of the Group as at the end of the financial period in the Latest Financials
is lower than S$10.3 billion, which would represent a decrease in the net asset value of the
Group by at least 10 per cent from that stated in the Group’s 30 September 2019 financials; or
(ii) If the cumulative PAT of the Group for the 12 months up to and including the end of the financial
period in the Latest Financials is lower than S$556.9 million, which would represent a decrease
of at least 20 per cent from the cumulative PAT of the Group for the 12 months ended 30
September 2019 of S$696 million.
Given the importance of these MACs to the pre-conditions to the Offeror making the Offer, we feel it is
important to ensure shareholders of the Company have clarity on the matters canvassed by analysts, and
reported in The Business Times, and the impact they may have on the Offer. Of course, if there are any
material developments or updates, the Offeror will make the required disclosures on the SGX.


Stay home and stay safe, valuebuddies.

Wow!!! This is to clarify BT article??? More leaning toward confusing everybody.