Impairment for Keppel unit Floatel clouds fate of Temasek's offer

IT will be months before Keppel Corp shareholders can celebrate Temasek Holdings' proposed partial bid for control over the infrastructure and property conglomerate. Meanwhile, two recent developments ought to wake the market up from its reverie that this is a come-rain-or-shine offer.

On June 1, Keppel disclosed that it has pushed its associate company, Floatel International, to review assumptions used to decide on the impairment of the latter's vessels. This happened after Oslo-listed Prosafe - a key rival in the offshore accommodation space - made an impairment of US$810.5 million to the book value of its vessels.

Prosafe's impairment, which came after a re-assessment of the market outlook and assumptions used in the calculation of the valuation-in-use (VIU) of its vessels, dwarfed Floatel's own impairment of some US$30 million that was recognised in Q4 FY2019.