Singapore investment company Temasek is walking away from its $4.1 billion conditional offer to buy control of Keppel Corp.

This comes after Keppel posted a second-quarter net loss of $697.6 million, breaching a precondition for Temasek's offer.

Kyanite Investment Holdings, a unit of Temasek, invoked a material adverse change clause in pulling out of the deal, according to a bourse filing yesterday.

The Securities Industry Council of Singapore said it has no objection to Temasek invoking the clause and pulling out of the deal.

In October last year, Temasek offered to increase its one-fifth stake in Keppel to 51 per cent by buying an additional 30.6 per cent stake at $7.35 per share.

But Keppel's stock has tumbled about 20 per cent this year amid the Covid-19 pandemic.

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