Keppel Land : Announcement - Selective Capital Reduction by Keppel Land (SGXNET)

95e947dc-df61-4062-9bbb-60545cf53465.pdf

KEPPEL LAND LIMITED

(Incorporated in Singapore) (Company Registration No. 189000001G)

ANNOUNCEMENT PROPOSED SELECTIVE CAPITAL REDUCTION

•	S$4.24 for each Share cancelled
•	The Cash Distribution reflects the Offer Price of S$4.38 per Share as adjusted for the FY2014 Dividend of S$0.14 per Share
•	Opportunity for the Participating Shareholders to realise the value of their Shares following the Delisting
•	Shareholders owning approximately 19.10 per cent. of the remaining Shares held by the Participating Shareholders have provided undertakings to vote in favour of the Selective Capital Reduction
•	If the Participating Shareholders do not approve the Selective Capital Reduction, there is no guarantee that another opportunity will arise in the future for them to realise the value of their Shares

1. INTRODUCTION

   
   

   The board of directors (the "Board") of Keppel Land Limited (the "Company") wishes to announce that it proposes to seek the approval of the shareholders of the Company (the "Shareholders") at an extraordinary general meeting of the Company (the "EGM") to be convened for a selective capital reduction exercise to be undertaken by the Company (the "Selective Capital Reduction") pursuant to Section 78G of the Companies Act, Chapter 50 of Singapore (the "Companies Act").

   
   

2. SELECTIVE CAPITAL REDUCTION

   
   

3. Background. On 12 February 2015, DBS Bank Ltd. ("DBS") and Credit Suisse (Singapore) Limited, for and on behalf of Keppel Corporation Limited (" KCL "), made a voluntary unconditional cash offer (the "Offer") to acquire, inter alia, all the issued ordinary shares ("Shares") (excluding treasury shares) in the capital of the Company, other than those already owned, controlled or agreed to be acquired by KCL.

   
   

   The Offer closed at 5.30 p.m. (Singapore time) on 31 March 2015 and the Company was delisted from the Main Board of the Singapore Exchange Securities Trading Limited (the "SGX- ST") at 9.00 a.m. (Singapore time) on 16 July 2015 (the "Delisting"). As at 11 March 2016, being the latest practicable date prior to the publication of this Announcement (the "Latest Practicable Date"), KCL holds 1,535,581,235 Shares, representing approximately 99.27 per cent. of the total number of issued Shares1.

   
   

4. Company's Proposal. The Company proposes to implement the Selective Capital Reduction and cancel all the Shares held by the Shareholders, except those held by KCL (the "Participating Shareholders"), to provide the Participating Shareholders with an avenue to realise the value of their Shares following the Delisting. The Participating Shareholders will receive S$4.24 for each Share held that is cancelled as a result of the Selective Capital Reduction.

   
   

   1 In this Announcement, for the purposes of computation, the total number of issued Shares is 1,546,881,101 Shares as at the Latest Practicable Date.

5. Reduction of Share Capital. The Selective Capital Reduction will involve reducing the share capital of the Company from S$2,408,649,022.59 comprising 1,546,881,101 Shares to S$2,360,737,590.75 comprising 1,535,581,235 Shares, representing a reduction of the total issued share capital of the Company by approximately 0.73 per cent..

   
   

6. Process. The Selective Capital Reduction will be effected by:

   
   

7. cancelling the amount of S$47,911,431.84 constituting part of the total paid-up share capital of the Company held by the Participating Shareholders; and

   
   

8. cancelling 11,299,866 of the said Shares constituting part of the total issued share capital of the Company held by the Participating Shareholders.

   
   

9. Cash Distribution. The aggregate sum of S$47,911,431.84 arising from the Selective Capital Reduction will be returned to the Participating Shareholders in cash, on the basis of S$4.24 for each Share held by each Participating Shareholder that is cancelled as a result of the Selective Capital Reduction (the "Cash Distribution").

   
   

   The amount of S$4.24 which the Participating Shareholders will receive for each Share so cancelled represents a premium of 16.2 per cent. over the last transacted price of S$3.65 per Share on the SGX-ST on 20 January 2015, being the last full day of trading in the Shares on the SGX-ST preceding the announcement relating to the Offer released by DBS, for and on behalf of KCL, on 23 January 2015 (the "Offer Announcement Date").

   
   

10. Funds for the Selective Capital Reduction. The Selective Capital Reduction will be funded from existing cash and cash equivalents.

    
    

11. INFORMATION ON KCL

    
    

    KCL is a public company incorporated in Singapore and listed on the Main Board of the SGX-ST. The KCL Group2 includes Keppel Offshore & Marine, Keppel Infrastructure, Keppel Telecommunications & Transportation and the Company, among others. Keppel Offshore & Marine is a leader in offshore rig design, construction and repair, ship repair and conversion and specialised shipbuilding. Its "Near Market, Near Customer" strategy is bolstered by a global network of 20 yards and offices in the Asia-Pacific, Gulf of Mexico, Brazil, the Caspian Sea, Middle East and the North Sea regions. Keppel Infrastructure drives the KCL Group's strategy to invest in, own and operate competitive energy and related infrastructure. Keppel Infrastructure taps the expertise and technology of its engineering business to grow its power and gas, environmental and energy efficiency businesses. Keppel Telecommunications & Transportation is a leading service provider in the Asia-Pacific and Europe with businesses in logistics and data centres.

    
    

    For the financial year ended 31 December 2015 ("FY2015"), the KCL Group had revenues of S$10,296 million and net profit before income tax and non-controlling interests of S$1,997 million, with net assets of S$11,096 million as at the end of FY2015.

    
    

    As at the date of this Announcement (the "Announcement Date"), the directors of KCL are Dr Lee Boon Yang, Mr Loh Chin Hua, Mrs Oon Kum Loon, Mr Tow Heng Tan, Mr Alvin Yeo Khirn Hai, Mr Tan Ek Kia, Mr Danny Teoh Leong Kay, Mr Tan Puay Chiang, Mr Till Bernhard Vestring and Ms Veronica Eng Siang Yang.

    
    

    2 In this Announcement, the term "KCL Group" means KCL and its subsidiaries.

12. RATIONALE

    
    

    The Selective Capital Reduction is an internal corporate exercise that is proposed by the Company for the Participating Shareholders.

    
    

    Following the Delisting, it has become difficult for the Participating Shareholders to realise their investment in the Shares given the lack of a public market for the Shares. With the Selective Capital Reduction, the Participating Shareholders will have an opportunity to realise the value of their Shares.

    
    

    The Selective Capital Reduction would enable the Company to return the aggregate sum of S$47,911,431.84 in cash to the Participating Shareholders in respect of the cancellation of the Shares held by them.

    
    

    The Cash Distribution of S$4.24 for each Share cancelled as a result of the Selective Capital Reduction will result in the Participating Shareholders receiving effectively the same price per Share received by former shareholders of the Company who tendered their Shares in acceptance of the Offer (the "Accepting Shareholders") at the base offer price of S$4.38 for each Share (the "Offer Price") for the following reasons:

    
    

13. the Offer Price had been determined on the basis that the Shares to which the Offer relates will be acquired with the right to receive any dividends, rights and other distributions and/or return of capital that may be declared, paid or made by the Company on or after the Offer Announcement Date;

    
    

14. the Accepting Shareholders were paid the adjusted Offer Price of S$4.24 for each Share if the settlement date of their Shares under the Offer fell after the books closure date for determining entitlements to the final one-tier tax exempt dividend of S$0.14 per Share (the "FY2014 Dividend") for the financial year ended 31 December 2014 (the "Books Closure Date") as such Accepting Shareholders received the FY2014 Dividend;

    
    

15. the Accepting Shareholders were paid the unadjusted Offer Price of S$4.38 for each Share if the settlement date of their Shares under the Offer fell on or before the Books Closure Date as such Accepting Shareholders did not receive the FY2014 Dividend; and

    
    

16. as the Participating Shareholders received the FY2014 Dividend in respect of their Shares from the Company, the Cash Distribution reflects the Offer Price as adjusted for the FY2014 Dividend.




If the Participating Shareholders do not approve the Selective Capital Reduction, there is no guarantee that another opportunity will arise in the future for them to realise the value of their Shares.




17. EXEMPTIONS BY THE SECURITIES INDUSTRY COUNCIL

    
    

    The Securities Industry Council has exempted the Selective Capital Reduction from Rules 14, 15, 16, 17, 20.1, 21, 22, 28, 29 and 33.2 and Note 1(b) on Rule 19 of the Singapore Code on Take-overs and Mergers (the "Code").

    
    

18. CONFIRMATION OF FINANCIAL RESOURCES

    
    

    DBS, as financial adviser to the Company in connection with the Selective Capital Reduction, confirms that sufficient financial resources are available to the Company to fund the aggregate Cash Distribution which will be returned to the Participating Shareholders if the Selective Capital Reduction becomes effective.

19. DISCLOSURES

    
    
20. Holdings and Dealings

    
    

21. Relevant Persons' Holdings. Paragraph 1 of the Appendix to this Announcement sets out the number of KLL Securities3 owned, controlled or agreed to be acquired by (a) KCL and its directors and (b) DBS (collectively, the "Relevant Persons") in connection with the Selective Capital Reduction as at the Latest Practicable Date.

    
    

22. No Other Holdings and Dealings. Save as disclosed in this Announcement, none of the Relevant Persons:

    
    

23. owns, controls or has agreed to acquire any KLL Securities as at the Latest Practicable Date; or

    
    

24. has dealt for value in any KLL Securities during the period commencing three months prior to the Announcement Date and ending on the Latest Practicable Date.

    
    

25. No Material Arrangements. As at the Latest Practicable Date, none of the Relevant Persons has entered into any arrangements (whether by way of option, indemnity or otherwise) in relation to any KLL Securities which might be material to the Selective Capital Reduction.

    
    

26. No Other Arrangements. As at the Latest Practicable Date, none of the Relevant Persons has:

    
    

27. granted any security interest relating to any KLL Securities to another person, whether through a charge, pledge or otherwise;

    
    

28. borrowed any KLL Securities from another person (excluding borrowed KLL Securities which have been on-lent or sold); or

    
    

29. lent any KLL Securities to another person.

    
    

30. Irrevocable Undertakings. As at the Latest Practicable Date, the Relevant Persons and/or the Company have received irrevocable undertakings from the persons listed in paragraph 2 of the Appendix to this Announcement to vote in favour of the Selective Capital Reduction (the "Irrevocable Undertakings"). The Irrevocable Undertakings will lapse if the Company decides not to proceed with the Selective Capital Reduction for any reason whatsoever, upon the release of an announcement by the Company on the Company's website athttp://www. keppelland.com.sg of such decision.

    
    

    Save as disclosed in this Announcement, none of the Relevant Persons and/or the Company has received any irrevocable undertaking from any Shareholder to vote in favour of the Selective Capital Reduction.

    
    

31. Confidentiality. In the interests of confidentiality, KCL has not made enquiries in respect of certain other parties who are or may be presumed to be acting in concert4 with KCL in connection with the Selective Capital Reduction. Further enquiries will be made of such persons after the Announcement Date and the relevant disclosures will be made in the Circular (as defined below).




3 In this Announcement, "KLL Securities" means any Shares or securities which carry voting rights in the Company or convertible securities, warrants, options or derivatives in respect of the Shares or securities which carry voting rights in the Company.

4 In this Announcement, the expression "acting in concert" shall have the same meaning ascribed to it in the Code.