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Keppel chief pours cold water on offshore and marine merger rumours

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Keppel Corp has poured cold water on a possible merger of its offshore and marine business.

Keppel ceo Loh Chin Hua, appeared to reject any merger or acquisition for Keppel Offshore & Marine, when quizzed about recent market rumours of a merger with rival Sembcorp Marine at its annual result briefing on Thursday.

Revived talk of a merger of Keppel and Sembcorp’s offshore and marine businesses have been sparked by a surge in Sembcorp Marine’s share price which stands at SGD2.54 on Friday morning compared SGD1.58 on 12 January.

Loh noted the question of a merger “comes up every once in a while”.

He said that Keppel Offshore & Marine had undertaken a significant rightsizing exercise reducing its direct workforce from 36,000 to 16,000 and it had also made its footprint more efficient.

“So we believe that this is the right size for us in light of the market outlook and we do not see at this point in time any upside in terms of having capacity. In other words if there is no value in adding capacity any, not necessarily with Sembcorp….or acquitsition for that matter may not make sense for us at this point in time,” Loh stated.

The world’s largest offshore jack-up rig builder has been hard hit the slump in the oil price. Keppel reported a net loss of SGD216m for 2017, excluding the one-off penalties of $422m related to a bribery and corruption scandal in Brazil.