Singapore's CitySpring to merge with Keppel Infrastructure Trust

[SINGAPORE] Singapore's CitySpring Infrastructure Trust has agreed to buy the assets and businesses of Keppel Infrastructure Trust (KIT) to create a trust with total assets of over S$4 billion (US$3 billion).

The two firms said on Tuesday that CIT would issue 1.3 billion new units as part of the deal to create the largest Singapore infrastructure-focused business trust. Each KIT unitholder will receive 2.106 new CIT units in exchange for every KIT unit held.

As part of the agreement, KIT has also agreed to buy a 51 per cent stake in Keppel Merlimau Cogen, a power plant owner, for S$510 million in cash. It said it will undertake an equity fund raising of up to S$525 million to pay for the deal.

Singaporean industrial conglomerate Keppel Corp, in which state investor Temasek Holdings owns a 20.4 per cent stake, holds 49.2 per cent of Keppel Infrastructure. KIT owns two waste-treatment plants and a water-treatment plant.

Temasek also holds 37.4 per cent of CIT, which owns Singapore's sole producer and retailer of piped gas and a desalination plant among other assets.

Keppel and Temasek will remain the two largest unitholders in the combined trust if the deal goes ahead. The pair will abstain from voting on the transaction.

Stocks of both Keppel Infrastructure Trust and CitySpring Infrastructure Trust have been on trading halts since Friday.

The deals are expected to be completed in the second quarter of 2015.

REUTERS