Keppel Corp

Keppel Corp: is forking out NOK 61m (S$13.2m) for a 49.9% stake in Norwegian offshore wind turbine foundation designer OWEC Tower, to help it gain a foothold in the segment. The acquisition comes with a call option for KEP to purchase shares from OWEC’s founders, which can be exercised in 3yrs, up till early Jan 2017. The acquisition will be funded using internal working capital.

KEP notes the offshore wind energy industry is rapidly gain traction around the world. With a larger no. of offshore wind farms under construction and planning, the co. expects a huge increase in demand for foundation structures.

HSBC today reiterates its Overweight call on the stock, with a revised TP of $13.15 (from $13.45) tempered by property pressures. Nevertheless, the house remains positive on O&M and infrastructure. Believes the level of current and planned E&P cannot be supported by the ageing offshore rig fleet which also needs replacing. Notes 4Q11 devt such as new drilling in the Gulf of Mexico, a revitalized North Sea market and progress on Petrobras’ Campos basin further reinforce the positive backdrop, while its $5-6b annual order forecast in the next 3-4 yrs should underpin upside risk.