Singaporean conglomerate Keppel Corp’s on Thursday reported a second-quarter loss that breaches a threshold in state investor Temasek Holdings’ $3 billion conditional offer to buy control of the company.
Temasek offered to raise its stake and buy control of Keppel in October last year, leading to expectations of consolidation in the domestic rig building sector.
Temasek declined to comment on Keppel’s results and the impact on its conditional offer.
Keppel’s CEO Loh Chin Hua said: “We believe that the 20% threshold in the MAC (material adverse change) clause in respect of net profit after tax has been crossed.
The CEO said that this meant the pre-condition in Temasek’s offer had not been satisfied as of Thursday.
Loh said the company was unable to comment on the offer or the action that Temasek could take.
Keppel reported a net loss of S$697 million for the quarter ended June compared with a net profit of S$153 million a year ago. That marked its biggest quarterly loss in at least 15 years, Refinitiv data showed.
Keppel, whose businesses range from property development to rig-building, said it incurred impairments of S$919 million, mostly in its offshore and marine business.
Excluding impairments, net profit would have been up 45% to S$222 million for the quarter, it said.
“Given the continuing impact of COVID-19, 2H 2020 will probably remain very challenging,” Loh said.
Keppel’s shares closed 3.6% lower at S$5.40 ahead of the results. They have fallen 20% this year, close to the level at which they were trading when Temasek made its conditional bid of S$7.35 per share.
Temasek already owns more than 20% of Keppel.