Keppel Sells M1 Telco Business to Simba Telecom in S\$1.43 Billion Deal: What Retail Investors Must Know

Key Points from the Keppel Media Briefing

• Keppel Ltd. announces divestment of M1’s telco business to Simba Telecom for S\$1.43 billion enterprise value.
• Keppel will receive close to S\$1.0 billion in cash for its 83.9% effective stake in M1.
• Transaction is part of Keppel’s shift towards an asset-light, global asset manager strategy, focusing more on digital infrastructure.
• M1’s ICT business and certain assets are carved out and retained by Keppel, with a carrying value exceeding S\$300 million.
• Keppel expects net cumulative cash proceeds of more than S\$700 million from its investment in M1, alongside retained assets.
• Estimated accounting loss of S\$222 million from the transaction, largely due to goodwill and intangibles.
• Pro Forma NTA per share will rise from S\$4.72 to S\$5.29, and net debt/EBITDA will improve from 2.4x to 1.7x after the transaction.
• No shareholder approval required for this transaction.
• Transaction subject to regulatory approval (IMDA) and restructuring of M1 Group.
• Keppel has invested S\$1.4 billion in M1 since 1994; total cash proceeds from investment and divestment expected to be S\$2.1 billion.
• Deal is expected to complete in the next few months.

Detailed Analysis for Retail Investors

1. Strategic Rationale and Market Impact

Keppel’s decision to divest its telco business marks a significant shift in its corporate strategy. By selling to Simba Telecom, Keppel is sharpening its focus on asset-light business models, notably digital infrastructure, which includes data centres and subsea cables. The retained ICT business of M1 aligns perfectly with this aim, as it is considered a high-growth segment.

2. Financial Implications and Shareholder Value

The deal values M1’s telco business at an attractive 7.3x EV/EBITDA, higher than many market peers, indicating strong confidence in the transformed business since Keppel’s privatisation of M1 in 2019. Despite an estimated accounting loss of S\$222 million (due to goodwill/intangibles), Keppel will unlock nearly S\$1.0 billion in cash proceeds.

Importantly, Keppel expects to receive S\$2.1 billion in total cash proceeds (including dividends since 1994), resulting in net cumulative cash proceeds of over S\$700 million after accounting for its initial investments. Additionally, Keppel will retain high-growth assets worth over S\$300 million.

For shareholders, the transaction will improve pro forma net tangible assets (NTA) per share from S\$4.72 to S\$5.29, and reduce the company’s leverage significantly (net debt/EBITDA from 2.4x to 1.7x). These changes are likely to strengthen Keppel’s balance sheet and may provide flexibility for future investments, debt reduction, or shareholder rewards.

However, the accounting loss of S\$222 million will lower Keppel’s pro forma EPS for 1H2025 to 9.1 cents (from 21.3 cents excluding the one-off loss), which could have a short-term negative impact on reported profitability.

3. Transaction Structure and Approvals

The deal structure ensures Keppel retains the valuable ICT business and certain assets, while Simba acquires the core telco entities. Completion is subject to regulatory approval by Singapore’s IMDA and internal restructuring of the M1 Group, but no shareholder vote is required—removing a potential hurdle and uncertainty.

4. Potential Price Sensitive Information

• Significant cash inflow and balance sheet improvement for Keppel could lead to a re-rating of the shares.
• Short-term accounting loss may cause a dip in reported earnings, but the underlying business strength and capital unlocked could offset this.
• Retention of high-growth ICT assets positions Keppel strongly for future expansion in the digital infrastructure space.
• No shareholder approval required, so transaction risk is mainly regulatory and operational.
• Potential for Keppel to use proceeds for new investments, debt reduction, or shareholder returns, which could positively impact share price.

Conclusion: Is This a Share Price Catalyst?

The sale of M1’s telco business to Simba Telecom is a major strategic move for Keppel, unlocking substantial cash and improving its financial metrics. The transaction, while resulting in a non-cash accounting loss, positions Keppel for future growth and flexibility, especially in higher-growth digital infrastructure segments. Retail investors should watch closely for the completion and subsequent capital allocation decisions, as these could materially affect the share price.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should do their own due diligence or consult a financial advisor before making any investment decisions. The information presented is based on publicly available sources and company announcements as of August 2025.

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