SINGAPORE: Keppel Infrastructure Fund Management (KIFM), in its capacity as Trustee-Manager of Keppel Infrastructure Trust (KIT), announced that KIT’s wholly-owned subsidiary, CityDC is divesting its 51% stake in Data Centre One to Keppel DC REIT for a consideration of $102.9 million.

The remaining 49% is held by WDC Development (WDC) and will also be acquired by Keppel DC REIT. The agreed consideration is based on the adjusted net asset value of Data Centre One, which is apportioned between CityDC and WDC in their respective shareholding proportion.

Data Centre One is a joint venture company that was formed in June 2014 between CityDC and WDC to develop, build and lease 1-Net North Data Centre (1-Net NorthDC). The five-storey purpose-built facility is located just outside the Woodlands Regional Centre. The agreed value for 1-Net North DC is $200.2 million.

In June 2019, CityDC launched a tender for the sale of 1-Net North DC. The bids received were evaluated holistically based on multiple criteria, and Keppel DC REIT was selected as the preferred bidder.

Matthew Pollard, Chief Executive Officer of the Trustee-Manager, said, “The divestment allows KIT to realise the remaining lease value in Data Centre One upfront, thus benefitting unit holders. Proceeds from this divestment are expected to be redeployed into quality acquisitions that will strengthen KIT’s portfolio, as well as for refinancing purposes and working capital needs.”

KIT intends to use part of the consideration for the repayment of Data Centre One’s loans, among others. Accordingly, the estimated net proceed to be received by KIT is $51.3 million.

The divestment is subject to and conditional upon, among others, the approval of unit holders of KIT at an extraordinary general meeting. When completed, it is expected to increase KIT’s earnings per Unit for the financial year ending 31 December 2019.

Post-divestment, KIT will have in its portfolio the Ixom Group, City Gas, the Basslink Interconnector, the Keppel Merlimau Cogen Plant, the Senoko Waste-to-Energy Plant, the Keppel Seghers Tuas Waste-to-Energy Plant, the Keppel Seghers Ulu Pandan NEWater Plant and the SingSpring Desalination Plant.