Keppel Infrastructure Trust (A7RU) and its trustee-manager, Keppel Infrastructure Fund Management Pte. Ltd., told unitholders on Jun, 8 2026 that strong governance safeguards and independent oversight underpinned negotiations for the proposed acquisition of an additional 39% interest in Keppel Merlimau Cogen (KMC).
Chief Executive Officer Kevin Neo said five of the trust’s six directors are independent and were actively involved in reviewing the deal, supported by Deloitte as independent valuer and Provenance Capital (PPCF) as independent financial adviser. A Directors’ Conflict of Interest Policy and the Audit and Risk Committee guided the evaluation.
Management explained that KMC has been carried at historical depreciated cost since 2015, while an external valuation pegged the fair value of KIT’s existing 51% stake above book value as of Dec, 31 2025. The price implied for the additional 39% stake is lower because it reflects a non-controlling interest.
Key assumptions in the discounted cash-flow analysis—including licence renewal beyond Dec, 31 2032, a zero tax rate, a 6.25% discount rate and projected capital expenditure—were benchmarked against industry data and validated by the independent parties, Neo added.
Chief Financial Officer Raymond Bay said the transaction will be financed through internal resources and/or additional debt, with no rights issue planned. KIT retains headroom under existing credit lines and intends to deploy remaining proceeds from recent divestments.
Management reiterated that inflationary pressures have had limited impact on the portfolio, noting KMC’s tolling agreement with Keppel Electric shields it from most operating and maintenance cost fluctuations. The trust seeks to maintain a “stable and sustainable” distribution, supported by a current trading yield of about 7.4 %.
KIT highlighted longer-term initiatives, including hydrogen-ready turbines at KMC to enhance the asset’s future competitiveness, and confirmed that operations at the Aramco Gas Pipelines Company, in which KIT holds a minority stake, remain unaffected by regional geopolitical tensions.
The proposed KMC transaction will be put to unitholders for approval at an upcoming extraordinary general meeting.