KEP exit to create mega yard for SMM
■ KEP shareholders would own c.25% in the new entity to be value accretive
(S$0.12) to match SMM’s TERP (S$0.12) post rights.
■ This is on assumption that KEP transfers its O&M op co (c.S$1.5bn) to the
new SMM combined entity at 1x FY20 BV and if the deal goes well.
■ Near-term more positive for KEP vs. SMM as the former is finally exiting
O&M via the above and divestment of stranded rigs/receivables of S$3.9bn.
■ For SMM shareholders, taking up the 3:2 rights means owning a mega yard
in the region backed by Temasek with potential order book of c.S$7-8bn.