Keppel Infrastructure Trust · SGX:A7RU
Keppel Infrastructure Trust — Merger or Acquisition (February 2015)
33 slides from Keppel Infrastructure Trust's merger presentation, February 2015
Slide 1: Investor Presentation
Investor Presentation Creating the largest Singapore infrastructure-focused business trust February 2015
Slide 2: Disclaimer
Disclaimer The information contained in this presentation is for information purposes only and does not constitute or form part of, and should not be construed as, any offer or invitation to sell or issue or any solicitation of any offer or invitation to purchase or subscribe for any units in Keppel
Slide 3: Table of contents
Table of contents 1. Overview of the Proposed Transactions 2. Key investment highlights of Combined Trust 3. Pro forma financials 4. Conclusion 2
Slide 4: 1. Overview of the Proposed Transactions
1. Overview of the Proposed Transactions
Slide 5: Overview of the Proposed Transactions
Overview of the Proposed Transactions KMC Acquisition Combination Acquisition of 51% interest in Combination of KMC by KIT KIT and CIT funded by an EFR A top-tier gas-fired power plant in Singapore Total assets (2) Market value (3) (S$m) (S$m) 4,076 Combined Trust to be named KIT 2,005 Pro forma t
Slide 6: Combination of KIT and CIT
Combination of KIT and CIT Combine KIT’s asset portfolio with CIT’s − KIT will sell all its business undertakings and assets to CIT in exchange for new CIT units − KIT will then carry out a distribution-in-specie of the new CIT units to its unitholders Overview − CIT to be renamed Keppel Infrastru
Slide 7: The KMC Acquisition and EFR
The KMC Acquisition and EFR Acquisition of a 51% stake in KMC from Keppel Energy Pte Ltd (“KE”) Overview KMC owns Keppel Merlimau Cogen Plant, a 1,300 MW combined cycle gas turbine generation facility located on Jurong Island, Singapore Cash consideration of S$510m Consideration Equity value
Slide 8: The KMC Plant
The KMC Plant Description of the KMC asset A substantial and strategic operational asset Metric Data A top-tier gas-fired power plant in Singapore Total generating 1,300 MW CCGT capacity Strategic asset in Singapore as power plants cannot be easily replicated given land constraints Location Temb
Slide 9: Combined Trust Structure
Combined Trust Structure Keppel Temasek KIT Public CIT Public 22.9%(1),(2) 19.97%(1),(2) 23.7%(1),(2) 33.4%(1),(2) 100% Trust Deed Combined KIFM Trust (3) 100% 51% 51% 100% City Gas City OG KMC Senoko WTE 100% 100% Basslink Pending completion Basslink 100% Telecoms Tuas WTE 70% 100% SingSpring Ulu P
Slide 10: Diversified portfolio of core infrastructure assets
Diversified portfolio of core infrastructure assets Water and Wastewater Power Generation, Electricity Waste Management Infrastructure Transmission and Gas KIT Senoko Plant Tuas DBOO Plant Ulu Pandan Plant KMC Only waste incineration Newest of the four waste One of Singapore's A top-tier gas
Slide 11: 2. Key investment highlights of Combined Trust
2. Key investment highlights of Combined Trust
Slide 12: Key investment highlights
Key investment highlights 1 Acquisition of core infrastructure assets with long term stable cash flows 2 Extend average life of distributions 3 Benefits from Keppel’s continued sponsorship 4 Combined Trust to adopt a three-pronged growth strategy 5 DPU accretive and attractive yield despite low risk
Slide 13: Acquisition of core infrastructure assets with long term stable cash flows
1 Acquisition of core infrastructure assets with long term stable cash flows KIT Investment Criteria CIT portfolio of highly strategic assets DataCentre KIT aims to provide unitholders with City Gas SingSpring Basslink KMC One long-term, regular and predictable distributions by pursuing investment
Slide 14: …which results in a well diversified portfolio
1 …which results in a well diversified portfolio Total assets by segment (KIT) Total assets by segment (KIT + KMC + CIT) (1) Electricity Water and Transmission Water and Wastewater Wastewater 25% Treatment Treatment 7% 12% Gas 12% Waste Management S$572.8m(2) S$3.9 billion(2) 13% Waste Management 88
Slide 15: Extend average life of distributions
2 Extend average life of distributions Value beyond initial contract life 50 yrs KMC and Basslink have KMC 15 + 10 yrs 25 yrs substantially longer design 15 yrs lives than existing contracts 4 yrs Average age Remaining Extension Design life Land lease contract life option Could be extended with
Slide 16: Benefits from Keppel’s continued sponsorship
3 Benefits from Keppel’s continued sponsorship A wholly-owned subsidiary of Keppel Corporation Limited Drives the Keppel group’s strategy to invest in, own and operate competitive energy and environmental infrastructure solutions and services Complementary businesses to that of the Combined Tr
Slide 17: Combined Trust to adopt a three-pronged growth strategy
4 Combined Trust to adopt a three-pronged growth strategy 1 Growth of existing portfolio 2 Keppel sponsorship 3 External opportunities Third Party Acquisitions Meet investment criteria Initial focus on existing energy, telecoms, waste and water sectors Jurisdictions with well Keppel Infrastruc
Slide 18: DPU accretive and attractive yield despite low risk profile
5 DPU accretive and attractive yield despite low risk profile Forward dividend yield (FY2015E) DPU(1) accretive transactions (S$ cents) 8.2% 7.9% 7.3% 7.3% 7.2% 8.09 (4) Average: 6.9% 7.82 7.98 (4) 7.86 (3) 7.86 (3) 6.2% 6.2% 6.1% 6.91 (2) 5.9% Hutchison Asian Pay Religare Combined KIT * Ascendas Ke
Slide 19: Combined Trust will become the flagship investment vehicle for Singapore infrastructure
6 Combined Trust will become the flagship investment vehicle for Singapore infrastructure Market value (1) Total assets (5) Free float (current vs pro forma) (7) (S$m) (2),(4) (S$m) (S$m) 2,005 +198% 1,955 (3) 4,076 +567% 1,362 +78% 1,199 (2) +278% 1,149 (3) 2,311 820 1,765 1,700 (6) 674 525 (2) 342
Slide 20: Combined Trust flagship investment vehicle (cont’d)
6 Combined Trust will become the flagship investment vehicle for Singapore infrastructure (cont’d) Market capitalization (in S$m) $8,450 (1) $2,005 (2) $1,286 $858 $792 $820 $674 Hutchison Port Combined Trust Asian Pay Religare Ascendas CIT KIT Holdings Trust Television Trust Health Trust India Trus
Slide 21: Unique investment proposition offering portfolio diversification
6 Unique investment proposition offering portfolio diversification Forward dividend yield (2015E) Infrastructure trusts Singapore Industrial REITs 10.3% 8.2% Average: 7.8% 7.8% 7.5% 7.6% 7.9% Average: 7.0% 7.3% 7.3% 6.1% 6.8% 7.2% 6.6% 6.2% 6.2% Accordia Hutchison Asian Pay Religare Combined KIT (1)
Slide 22: 3. Pro forma financials
3. Pro forma financials
Slide 23: Financial snapshot
Financial snapshot KIT(1) CIT(1) KMC(1) KIT + KMC Combined (in S$m) Trust Cash flows Adjusted EBITDA 52.2 128.7(2) 106.0(3) 158.2 292.2(4) Distributable cash flows 55.9 65.7(5) 44.2(3) 100.1 171.0(4) Total distributions 49.2 49.8 40.9 90.1 – 88.6 146.1 – 144.6(6) DPU (cents) 7.82 6.91(7) n.m. 7.86 –
Slide 24: Multiple sources of cash flows
Multiple sources of cash flows Adjusted EBITDA by segment (Combined Trust)(1) Power Generation 18% Electricity Transmission 19% Water and Wastewater Treatment 8% Waste Management 18% Gas 17% Non-controlling Interest 20% Regular and predictable cash flows from a diversified core portfolio of Singapor
Slide 25: Sustainable capital structure
Sustainable capital structure Recent financing demonstrates lenders’ confidence in the capital structure Recent − CIT’s, City Gas and Basslink loans were refinanced in 2014 Refinancing − KMC loan to be in place before closing Asset Based Apart from CIT’s S$142m corporate loans, the other loans a
Slide 26: Sustainable capital structure (cont’d)
Sustainable capital structure (cont’d) Maturity profile Debt overview (in S$m) Blended average interest rate between 3-4% Approximately 92% of the − Singapore average interest rates between 2-3% Combined Trust’s loans are due in 955.0 2019 and beyond − Australian average interest rates between 5
Slide 27: 4. Conclusion
4. Conclusion
Slide 28: Conclusion
Conclusion 1 Acquisition of core infrastructure assets with long term stable cash flows 2 Extend average life of distributions 3 Benefits from Keppel’s continued sponsorship 4 Combined Trust to adopt a three-pronged growth strategy 5 DPU accretive and attractive yield despite low risk profile 6 Comb
Slide 29: Appendices
Appendices
Slide 30: KMC Acquisition Structure
Overview of the Proposed Transactions KMC Acquisition Structure KCL(1) 100% 5 Repayment of KI(2) Existing Unitholders New investors Shareholder Loan 1 EFR Preferential Offer 1 1 Placement 2 Acquisition of 51% of KMC 3 Subscription of S$500m 100% <30% S$525m(4) 1 QPDS 2 4 Obtain S$700m Bank S$255
Slide 31: Transaction structure of the Combination
Overview of the Proposed Transactions Transaction structure of the Combination 4 Distribution of KIT Unitholders CIT Unitholders S$30m after completion but before the EFR 3 Distribution-in- 1 Distribution of specie of New CIT S$30m before Units completion CIT / Combined KIT Trust (1) 2 New CIT Units
Slide 32: EGM approvals sought
EGM approvals sought Resolution Description / Purpose 1 Ordinary resolution The proposed acquisition The Trustee-Manager intends to issue New KIT Units at an issue price to be determined so as to of a 51% equity interest in raise gross proceeds of up to approximately S$525 million to fund the KM
Slide 33: Pipeline from Sponsor
Pipeline from Sponsor Keppel Infrastructure’s pipeline Keppel Merlimau Cogen (49%) Operational since 2007 KI, as the sponsor of Combined Trust, owns 49% shareholding in KMC through Keppel Energy Changi Business Park (Keppel DHCS plant) First district cooling systems (DCS) plant in Singapore si
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