SINGAPORE (EDGEPROP) - Keppel Telecommunications & Transportation (Keppel T&T) is divesting its entire stake in Keppel Logistics to Geodis International SAS for a total consideration of approximately $80 million in cash.

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The consideration, which takes into account the enterprise value, financial position and Keppel Logistics’ business prospect, will value the company at an enterprise value of $150 million on a cash free, debt free basis.

The transaction includes Keppel Logistics’ businesses in Singapore, Malaysia and Australia, as well as UrbanFox. The transaction, however, will not include Keppel T&T’s logistics operations in China, which are the Jilin Food Zone Logistics Park, the Tianjin Eco-City Distribution Centre, the Keppel Wanjiang International Coldchain Logistics Park. Keppel Logistics’ stakes in Keppel Puninar Logistics in Indonesia and Indo-Trans Keppel Logistics in Vietnam will also not be included in the transaction.

Of the sum, $70 million will be payable in cash upon the completion of the divestment. The remaining $10 million would be placed in an escrow account to be released to Keppel T&T upon the fulfilment of certain performance targets in 2022 and 2023.

The entities that were being divested to Geodis registered a net loss of $5.2 million for the FY2021.

Following the divestment, Keppel T&T will continue to find opportunities to monetise the remaining non-core logistics assets and operations. “The divestment of Keppel Logistics, a non-core business that has been operating at a sub-scale level, is in line with the Keppel Group’s Vision 2030 plans to simplify and focus our business as well as enhance our earnings,” says Thomas Pang, CEO of Keppel T&T.

Keppel T&T’s priority would now be to scale up in areas of focus such as sustainable data centre solutions and subsea cable systems, continues Pang. "The transaction will also unlock capital that can be deployed to fund the Keppel Group’s growth initiatives,” he adds. “For over 50 years, Keppel Logistics has been providing customised integrated logistics solutions in Singapore. We believe the integration of Keppel Logistics as part of GEODIS would help accelerate Keppel Logistics’ growth, allowing it to scale up and provide even better value propositions to both its customers and internal stakeholders.”