Keppel sets S$500M share buyback program

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Keppel Corp. has set up a S$500 million share buyback program, under a mandate granted at its annual general meeting (AGM), the company said in a filing to SGX Thursday. 

The program will allow the company to purchase shares when they are undervalued due to market conditions, with the shares to be held as treasury shares, Keppel said in a filing to SGX. 

The repurchased shares will be used for vesting of employee share plans, and also possibly to pay for any mergers and acquisition activity, the company said. 

“As Keppel embarks on acquisitions, especially of founders’ platforms, using shares as acquisition currency would help ensure that the founders of such platforms have vested interests in the long-term success of Keppel, thereby aligning their interests with Keppel’s interests,” the company said.

Keppel noted that as part of its strategy, the Vision 2030 plan, it has monetized around S$2.9 billion of assets since the fourth quarter of 2020, putting it on track to exceed its goal of S$5 billion by end-2023. 

That has significantly lowered the group’s net gearing to 0.68 times at end-2021 from 0.91 times at end-2020, Keppel said. 

“The substantial capital unlocked from the asset monetisation programme would allow the company to fuel its organic and inorganic growth plans, especially in areas such as renewables, clean energy and decarbonisation solutions, and also reward shareholders for their continued confidence in the company through dividends,” Keppel said. 

Keppel set the amount of the buyback based on those factors and its strong performance in 2021, the filing said.