TUE, FEB 08, 2022 Francine Ho
THE trustee-manager of Keppel Infrastructure Trust (KIT) is investing US$250 million in a BlackRock-led consortium that will acquire a 49 per cent stake in Aramco Gas Pipelines Company, a unit of Saudi Arabian Oil Company (Aramco) that holds 20-year leasing rights for Aramco’s gas pipelines network.
The consortium is co-led by Hassana Investment Co.
In a bourse filing on Tuesday (Feb 8), the trustee-manager said it expects its indirect minority and non-controlling stake in the consortium’s special purpose vehicle (SPV) will provide long term, predictable cash flows to KIT as it is “investing into a strong and growing business that is underpinned by one of the world’s largest reserves of natural gas”.
KIT’s trustee-manager intends to fund its part of the acquisition with internal sources of funds and existing debt facilities, including a 2-year bridge facility taken up by KIT. It also plans to evaluate different funding options to repay the bridge facility, which may include proceeds from equity or debt capital market issuances.
Following completion of the consortium’s acquisition, the trust’s total assets under management (AUM) is estimated to grow to S$4.6 billion from S$4.5 billion as at Dec 31, 2021.
Post KIT’s investment, pro-forma net asset value per unit is expected to fall to 21.7 Singapore cents from 22.3 cents due to estimated acquisition expenses, assuming the transaction is fully funded by existing cash and external debt.
Gearing for the financial year ended December 2021 is estimated to rise to 27.7 per cent from 20.3 per cent had the investment been completed on Dec 31, 2021.
“The strategic addition of this gas pipeline business will allow KIT to diversify its income base geographically, as well as provide greater stability in the long term by replenishing the portfolio through the addition of another resilient business,” said Jopy Chiang, chief executive of the trustee-manager.
Units of KIT closed at 54 Singapore cents on Tuesday, down half a cent or 0.92 per cent.