Carrying value of Keppel's Floatel investment to almost triple to $284 million

SINGAPORE (THE BUSINESS TIMES) - Based on Floatel International's financial results for the fourth quarter of 2020 and the first quarter of 2021, the net financial impact on Keppel Corporation will be around $187 million, the mainboard-listed conglomerate said on Friday night (April 30).

As a result of equity accounting, the carrying value of Keppel's investment in offshore vessel company Floatel will thus almost triple to about $284 million, from some $96 million as at Dec 31, 2020.

The carrying value of this investment will be re-assessed for recoverability at the end of each financial reporting period.

Floatel, which recently completed its corporate restructuring, on Friday reported a US$551 million (S$733.3 million) net profit for the first quarter of this year, including a restructuring gain of some U$578 million.

Keppel said it will equity account for these Q1 results amounting to about $241 million, including its estimated $269 million share of the restructuring gain.

As for Q4 2020, Floatel recorded an additional impairment of its vessels of around U$81 million. Keppel will also equity account for this, amounting to about $54 million.

Under the consensual transaction for Floatel's restructuring, Keppel's wholly-owned subsidiary FELS Offshore retained its 49.92 per cent stake in Floatel and forgave a U$244 million loan.

Separately, Keppel Corp on Friday announced Keppel Land units will jointly develop eight plots of land in Tianjin with subsidiaries of Hong Kong-listed Sino-Ocean Group.

Shares of Keppel Corp fell $0.08 or 1.5 per cent to close at $5.42 on Friday, before these announcements.