Keppel Corp (S$5.26): Limited divestment options to cushion against any cash crunch
- Depressed O&M business and limited divestment options hinder ability to free up capital should it face a cash crunch
- two most likely divestment options are M1 (potential threat of new entrants), and its T27 data centre to Keppel DC
- M1 and T27 are expected to fetch proceeds of $342m and $200m respectively
- but the positive impact is insufficient to swing the house to take a more bullish stance on the group
- Odds to sell KrisEnergy and Dyna-Mac is low, as the group would need to realise significant losses at market values
- Borrowing ability may also be capped by its net-debt/EBITDA of 5.5x, and EBITDA-interest-coverage of 6.3x
- Maybank KE maintains Sell, although TP was raised by 4¢ to $4.54 to account for a lift in market values of its listed entities.
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