Keppel Telecommunications & Transportation entered deals to sell its stakes in Keppel Logistics (Foshan) and Keppel Logistics (Hong Kong) to Sinotrans’ subsidiary Sinoway Shipping for S$39 million, Keppel said in a filing to SGX Friday.
“The divestments are part of Keppel T&T’s efforts to sharpen its focus and reallocate capital to grow other parts of its businesses,” Thomas Pang, CEO of Keppel T&T, said in the statement.
Keppel Logistics (Foshan), or KLF, provides port services, dock operations and warehousing services, and also owns Lanshi port, which is due to be closed for redevelopment plans, and a 60 percent stake in Keppel Logistics (Foshan Sanshui Port), which operates the Sanshui port, the filing said.
Under the deal, Keppel T&T will sell its 70 percent stake in KLF for 176.4 million yuan, or around S$34.2 million, while Sinoway Shipping will provide 48.5 million yuan, or around S$9.4 million, to KLF to repay a shareholders’ loan due to Keppel T&T, the filing said.
Additionally, after the deal’s completion, KLF, Keppel T&T and Sinoway Shipping will negotiate with the local government for compensation for the Lanshi port closure, and once compensation is received, Sinoway Shipping will begin liquidating KLF, the filing said.
Sinoway Shipping will also pay 25.8 million yuan, or around S$5.0 million, for Keppel T&T’s 70 percent stake in Keppel Logistics (Hong Kong), or KLHK, the filing said. KLHK provides freight forwarding and barging services between Hong Kong, Shenzhen and Foshan, Keppel T&T said.