In today’s briefing:
- Keppel O&M Spin-Off Approaching Quickly
- Renesas (6723 JP): Steradian Acquisition Supports Alliance with Tata
- State Construction Firm to Buy 50% of East African Potash Mine
Keppel O&M Spin-Off Approaching Quickly
- After 18mos of hints, and two rights recapitalisations at Sembcorp Marine (SMM SP), SMM and Keppel Corp (KEP SP) announced a deal to merge their O&M businesses at end-April.
- Keppel shareholders would receive ~18 shares of SMM per share of Keppel owned, Keppel spins out the equity of its legacy rig assets and leaves the O&M biz clean.
- The structure announced lets us examine “forward KEP”, and anticipate interest and valuations post-spin, which is “supposed to” happen in Q4. We’re in Q4 now, and Keppel is interesting here.
Renesas (6723 JP): Steradian Acquisition Supports Alliance with Tata
- Acquisition of Steradian Semiconductors complements Renesas’ partnership with Tata Group and expands its presence in India.
- Follows purchase of Reality Analytics of the U.S. and Celeno Communications of Israel. Global footprint growing, technological sophistication rising to meet ADAS, AI and IIoT requirements.
- P/E below 10x on current guidance, but vulnerable to semiconductor down-cycle. Accumulate for long-term potential.
State Construction Firm to Buy 50% of East African Potash Mine
- State-owned infrastructure construction firm Sichuan Road and Bridge Group Co. Ltd. (SRBG) is planning to acquire a 50% stake in a major potash mine in East Africa in its latest push into the mining industry.
- Chengdu-headquartered SRBG has signed a $166 million deal to acquire half the stake in the Colluli Potash Project in Eritrea from Australian fertilizer developer Danakali Ltd.
- Once the deal is finalized, the Colluli potash mine will be SRBG’s second mining project in Eritrea
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