Keppel : & Sembcorp Marine Sign Definitive Agreements For Proposed Combination Of Keppel O&M And Sembcorp MarineDownload

The Creation of a Premier Global Player in Offshore Renewables, New Energy and Cleaner O&M Solutions

Media & Analyst Briefing

27 APRIL 2022

Brings together the world-class engineering capabilities, well-established track records and reputations for quality and reliability of the two companies with complementary competencies and operations

Creation of a Premier Global Player for the Renewable and Clean Energy Solutions Markets

Greater Synergies from Combined Operational Capabilities, Engineering Bench Strength and Track Record

Strengthens Singapore's Position as both a Maritime and Offshore and Marine Hub

Backdrop and Prospects for the O&M Sector

Keppel O&M and Sembcorp Marine have built respective capabilities and track records in offshore renewables, new energy and cleaner O&M solutions

Oil prices have rallied recently and medium-term market conditions have been improving for the O&M sector. However, the O&M sector continues to undergo a longer-term shift amidst the global energy transition

Prospects for renewables, such as offshore wind, are robust withgrowing commitments by governments and companies to achieve net zero carbon emissionsGood prospects in new energy, such as hydrogen and ammonia

Proposed Combination to be Effected by Dual Scheme Structure

Scheme

Keppel Corporation

• 1 Sembcorp Marine Scheme

  • ▪ Sembcorp Marine will undergo an internal restructuring through a scheme of arrangement whereby

    • ‒ Shareholders of Sembcorp Marine will exchange their shares in Sembcorp Marine for shares in the Combined Entity on a one-for-one basis

    • ‒ Sembcorp Marine will transfer its listing status to the Combined Entity

    • ‒ Sembcorp Marine Scheme will not be conditional on the approval of the Keppel O&M Scheme

• 2 Keppel O&M Scheme

  • ▪ Concurrently, Combined Entity will be combined with Keppel O&M(1) via a second scheme of arrangement ‒ Keppel to receive new shares in Combined Entity ‒ Keppel O&M to repay Keppel S$500 million in cash to settle outstanding interest and make a partial redemption of certain perpetual securities previously issued to Keppel

• 3 Asset Co Transaction

  • ▪ Keppel has entered into a definitive agreement for the sale of Keppel O&M's legacy rigs and associated receivables to Asset Co, which will be 90% owned by external investors, and the remainder by Keppel ‒ Keppel will receive a combination of ordinary shares, vendor notes and perpetual securities issued by Asset Co

Notes:

(1) Excluding (a) Keppel O&Mlegacy rigs and associated receivables which will b e sold to Asset Co and (b ) certain out-of-scope assets comprising mainly Keppel O&M's interests in Floatel International Ltd and Dyna-Mac Holdings Ltd, which will b e retained by Keppel

Proposed Combination based on a 50:50 enterprise value ratio

Sembcorp Marine

ShareholdersKeppel and its Shareholders

44%

56% ( 1)

S$500 million(2)

Combined Entity

100%100%

Master Services

Sembcorp MarineKeppel O&M(3)

Less: Out-of-Scope Assets(3)

Agreement

Asset Co

• ▪ Proposed Combination is based on a 50:50 enterprise value ratio between Keppel O&M and Sembcorp Marine, which is adjusted for the transaction structure, differences in capital structure and other adjustments to arrive at the agreed equity value exchange ratio of 56:44

  • o Keppel to receive S$500 million in cash pursuant to Keppel O&M's pre-combination restructuring

  • o There will be no further adjustments to the merger exchange ratio between signing and closing

• ▪ Keppel will distribute in-specie 46% of the Combined Entity shares to Keppel's shareholders and retain a 10% stake(1) in the Combined Entity

  • o Following this distribution-in-specie, Temasek will hold 33.5%(4) and be the largest shareholder of the Combined Entity

• ▪ Post-combination, under the Master Services Agreement, the Combined Entity through Keppel O&M will continue to provide construction, berthing, maintenance, and other associated services for the legacy rigs held by Asset Co

Notes:

• (1) Includes 10% of the issued shares of Combined Entity ("Retained Stake") that will b e placed in a segregated account for certa in identified contingent liabilities for a period of up to 48 months from the completion of the Proposed Combination. This segregated account will be managedby an independent third party who will have authority to monetise the RetainedStake based on pre-defined parameters

• (2) To finance the cash com ponent, Keppel O&M has entered into a com m itment letter with DBS Bank Ltd. for financing arrangements of up to S$500 m illion, sub ject to the satisfaction of the term s and conditions contained in the commitment letter. Keppel O&Mreserves the right to explore alternative financing options leadingup to the completion of the Proposed Combination

• (3) Excluding (a) legacy rigs and associated receivables which will be sold to Asset Co and (b ) certain out-of-scope assets comprisingmainlyKeppelO&M'sinterestsin Floatel International Ltd and Dyna-Mac Holdings Ltd, which will b e retained by Keppel

• (4) Based on 17,131,025,958 SembCorp Marine shares heldby Startree Investments Pte. Ltd., an indirect wholly-ownedsubsidiary of Temasek, and 371,408,292 Keppel shares held directly by Temasek as at the date of this press release. This figure excludes interests held b y Temasek's independently-managed portfolio companies.