Keppel Infrastructure Trust Approves Major Investment in Global Marine Group: Key Details for Investors

Keppel Infrastructure Trust (KIT) held its Extraordinary General Meeting (EGM) on 11 November 2025, where unitholders approved a significant investment in Global Marine Group (GMG), one of the world’s largest independent subsea cable solutions providers. This transaction and its implications could have a material impact on KIT’s future earnings and growth trajectory.

Key Points from the EGM

• Investment Details:
  • KIT will acquire an approximate 46.7% equity interest in GMG as an interested person transaction, with a total expected investment of S\$187.6 million.
  • Subject to the initial investment, KIT will also participate in a subsequent capital injection (future funding) to support GMG’s growth and fleet expansion.
• Voting Results:
  • Both ordinary resolutions related to the investment and future capital injection were passed with over 96% approval by voting unitholders.
• GMG’s Market Position:
  • GMG and its partners maintain 31% of the global maintained subsea cable length (450,000 km), covering three key zones with good growth potential. In some zones, GMG is the exclusive maintenance provider, while in others, it shares responsibilities with consortium partners.
• Financial Rationale and Projections:
  • Concerns over GMG’s historical net liabilities were addressed by noting that past figures were affected by non-core, loss-making businesses (power cable laying) that have since been divested.
  • GMG’s subsea cable business—a separate unit now—has been profitable in recent years.
  • The deal is expected to be accretive to unitholders, with distributable income projected to be higher than funds from operations (FFO), as major capex is funded by debt.
  • Estimated payback period for the investment is about 6.7 years, based on GMG’s EV/EBITDA ratio.
• Fleet and Competitiveness:
  • GMG owns six vessels with an average age of 29 years, which can typically operate up to 40-45 years if well maintained; there are no current plans to retire any vessels in the next 10 years.
  • Competitors’ vessels are generally newer and feature higher dynamic positioning (DP3 vs. GMG’s DP1/DP2), but management argues that DP3 is unnecessary for fibre optic cable laying and would not be cost-effective given current charter rates.
  • Future capital injection is intended for growth (fleet expansion), not replacement of existing vessels.
• Management and Governance:
  • KIT and Keppel Infrastructure Fund (KIF) will collectively control over 90% of GMG and will appoint all GMG directors, including a subject matter expert. KIT does not intend to be a passive investor and will leverage Keppel’s operational expertise.
• Risk Factors and Due Diligence:
  • Technological disruption risk is low, as subsea cables remain the main infrastructure for global data transmission.
  • Due diligence was comprehensive, involving KPMG (financial/tax), Latham & Watkins (legal), and Hardiman (commercial). Hardiman is specialized in the subsea cable industry.
  • No additional provisions are expected for defaults, as the target business has been historically profitable.
• Revenue Streams and Market Tailwinds:
  • GMG generates revenue from standby fees and maintenance work for cable owners. The anticipated growth of AI is expected to boost demand for subsea cables and, consequently, for GMG’s services.
• Shareholder Concerns Addressed:
  • Shareholders questioned the accuracy of market share claims, vessel competitiveness, and the basis for the “Ticker Amount” (compensation for time value of capital between transaction announcement and completion). Management provided detailed clarifications on all points.
  • Questions about KIT’s previous investments (Eco Management Korea and Borkum Riffgrund 2) were addressed, noting that one-off factors affected FY2023 results and that KIT’s total shareholder returns since 2015 outperformed the Straits Times Index.

Potential Price-Sensitive Information

• Approval of a S\$187.6 million investment in a major subsea cable solutions provider, which could significantly alter KIT’s earnings profile and asset base.
• Projected accretion to distributable income and an estimated 6.7-year payback period, providing clarity and confidence about the economics of the deal.
• Strategic move into a sector with long-term growth drivers (digital infrastructure, AI-driven data demand), positioning KIT for future upside.
• Management’s active role in GMG’s governance and intention to leverage Keppel’s operational expertise may provide reassurance about value creation and risk management.
• Addressed concerns about fleet age and competitiveness, and confirmed no imminent large capex for vessel replacement, mitigating near-term cash flow risks.

Conclusion

The approval of the GMG investment marks a pivotal expansion for KIT into the global subsea cable maintenance sector, underpinned by robust due diligence and a clear plan for value creation. The deal’s accretive nature, supported by strong market fundamentals and management’s hands-on approach, could be a catalyst for KIT’s share performance in the medium to long term. Investors should monitor KIT’s execution of this strategy, as successful integration and growth of GMG could materially enhance KIT’s distributions and market value.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult their financial advisor before making any investment decisions. The information is based on official EGM minutes and management commentary, and while care has been taken to ensure accuracy, future outcomes may differ from projections stated herein.

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