Keppel to Divest Entire Stake in M1 Limited for S\$985 Million: What Retail Investors Must Know About This Strategic Move

Key Highlights of Keppel’s Proposed Divestment of M1 Limited

• Keppel Ltd. has announced it will sell its entire stake in M1 Limited to Simba Telecom Pte. Ltd. for an estimated consideration of S\$985 million in cash.
• The divestment follows a restructuring to carve out M1’s ICT business and certain assets, which Keppel will retain.
• Keppel expects to record an estimated net loss of S\$222 million on the disposal, based on the book value of the assets sold.
• The transaction is in line with Keppel’s asset-light strategy and aims to unlock capital for growth, debt reduction, or shareholder rewards.
• The deal is classified as a “disclosable transaction” under SGX rules and does not require shareholder approval.
• The completion of the deal is subject to regulatory approval and other conditions, including no material deterioration in M1’s EBITDA prior to closing.

In-Depth Details: What Shareholders Need to Know

1. Structure and Parties Involved

Keppel is divesting its entire interest in M1 Limited (“M1”) through its wholly-owned subsidiary Keppel Konnect Pte. Ltd. (“KKPL”) and its joint venture Konnectivity Pte. Ltd. KKPL directly holds 19.31% of M1, while Konnectivity (80% owned by KKPL, 20% by Straits Multimedia Private Limited, itself a Cuscaden Peak Investments subsidiary) holds 80.69%. The purchaser, Simba Telecom, is Singapore’s fourth fully licensed mobile operator and is wholly owned by Tuas Limited, an ASX-listed company, which acts as guarantor for the transaction.

2. The Proposed Transaction & Restructuring

Before the transaction closes, M1 will carve out its ICT business (AsiaPac Technology Holding Pte. Ltd. and its subsidiaries), investment securities (M1 Telinet Pte. Ltd.), and a leasehold property (MiWorld, 9 International Business Park). These assets will remain with Keppel. Only the restructured M1 Group (excluding these assets) will be sold to Simba Telecom.

3. Key Conditions and Timeline

• The sale depends on obtaining all necessary regulatory approvals, particularly from the Infocomm Media Development Authority of Singapore (IMDA).
• The restructuring must be completed before the sale.
• There must not be a >17.5% drop in M1’s EBITDA (excluding excluded assets) compared to S\$195.4 million for the year 2024.
• If conditions are not met within 6 months of regulatory application, the deal may be terminated. The purchaser can also withdraw if there is a material breach of warranties.

4. Financial Impact

• Estimated proceeds: S\$985 million in cash (subject to post-completion adjustments).
• Book value of assets sold: S\$1,207 million (as of 30 June 2025).
• Net tangible asset value: S\$151 million.
• Estimated net loss on disposal: S\$222 million (does not include transaction costs; actual loss may vary).
• Use of proceeds: Keppel intends to deploy proceeds for growth investments, debt reduction, or shareholder rewards.

5. Strategic Rationale

The divestment marks a major step in Keppel’s transformation into an asset-light global asset manager and operator. By selling M1’s core telecom business and retaining its ICT and certain property assets, Keppel sharpens its focus on digital infrastructure and asset management. The company highlights that the deal “crystalises” decades of value creation from its original investment in M1 since 1994, including through M1’s earlier privatisation and dividends.

Keppel also expects the transaction to benefit Singapore’s telecom sector by enabling synergies between the two operators (M1 and Simba Telecom).

6. Shareholder and Market Sensitivities

• Price-Sensitive: The net loss on disposal (S\$222 million) is material, but the significant cash inflow and potential for redeployment could positively affect future performance and shareholder returns.
• No Shareholder Approval Required: The deal is classified as a “disclosable transaction” as the size tests are between 5% and 20%—so no EGM or shareholder vote is needed.
• NTA and EPS Impact: Pro forma NTA per share rises from S\$5.12 to S\$5.66 after the transaction. EPS is projected to fall slightly to 51.5 cents (excluding disposal loss) or 39.5 cents (including the one-off loss).
• Regulatory Risk: Deal completion hinges on timely IMDA approvals and stable M1 financials up to closing.
• No Director Interest: No directors or controlling shareholders have any direct or indirect interest in the transaction.

Potential Share Price Impact

This is a significant restructuring and strategic realignment for Keppel. While the disposal is at a loss relative to book value, the unlocking of S\$985 million in cash grants Keppel substantial flexibility to pursue higher-growth opportunities, reduce debt, or offer rewards to shareholders. The move away from direct telco operations also positions Keppel as a more focused digital infrastructure and asset-light group. The market’s reaction will hinge on how effectively management redeploys the proceeds, and the speed and certainty of deal completion.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Retail investors should conduct their own due diligence or consult with a professional advisor before making investment decisions. The author and publisher are not liable for any losses incurred from reliance on this information.

View Keppel Historical chart here