A UNIT of Keppel Corporation has agreed to increase its shareholding in KrisEnergy, an oil and gas exploration and production company that is planning to list on the Singapore Exchange (SGX) this year.
Devan International, a wholly-owned subsidiary of Keppel, has exercised a call option to buy another 16 per cent of KrisEnergy, provided that the firm carries out its initial public offering (IPO) by August 15, Keppel said on Monday.
The option includes an earn-out mechanism, in which Devan will pay KrisEnergy the difference between the original exercise price of the option and the IPO offering price, subject to certain conditions.
If this mechanism is triggered, the maximum price that Devan will pay to exercise the call option would be about US$122.7 million (S$155.7 million), Keppel said.
In addition, Devan has agreed to subscribe for new shares in KrisEnergy's IPO as a cornerstone investor. It will pay US$35 million for these shares.
Following both the exercise of the call option and the cornerstone subscription, Devan's stake in KrisEnergy will increase from the current 20 per cent to just above 30 per cent, Keppel said.
KrisEnergy was set up in 2009 by the founders of Pearl Energy, another Singapore-headquartered upstream oil and gas company that was acquired by Mubadala in 2008. Its directors include Keppel's chief executive officer Choo Chiau Beng and chief financial officer Loh Chin Hua.