* Keppel may use cash to support KepLand, take on projects
* CIMB says Keppel may have net cash position of S$1 bln
(updates share prices, analyst quote)
SINGAPORE, May 25 (Reuters) - Shares of Singapore Petroleum Co (SPC) SPCS.SI soared as much 24 percent on Monday after China’s PetroChina (0857.HK) said it will buy Keppel Corp’s (KPLM.SI) 45.5 percent stake in the oil refiner.
Keppel Corp shares also jumped, up as much as 10 percent following Sunday’s news that PetroChina will pay S$1.47 billion ($1.02 billion) for the stake and plans to make a general offer to buy the rest of the firm. [ID:nSIN335305]
The deal valued SPC at S$3.2 billion, or about S$6.25 per share, well above Friday’s closing price of S$5.04.
By midday, SPC was up around 21 percent at S$6.09 with 6.4 million shares traded, while Keppel was 5.3 percent higher at S$7.33, both comfortably out-performing a 0.3 percent rise in the benchmark Singapore index .FTSTI.
PetroChina’s Hong Kong-listed shares fell 0.5 percent, in line with a decline in the Hang Seng index .HSI.
Analysts said the deal will bolster Keppel Corp’s cash position to take on more projects, distribute cash to shareholders and support Keppel Land KLAN.SI, which is in the midst of raising S$712.3 million via a rights issue.
“The sale will place the group in a net cash position of about S$1 billion after Keppel Land’s rights issue,” said CIMB analyst Lim Siew Khee. “We would expect the Keppel Group to distribute 40-50 percent of the net gain of S$660 million from the sale, translating into 20 cents per Keppel Corp share.”
SPC shares a 285,000 barrels per day refinery in Singapore with U.S. energy major Chevron Corp (CVX.N), and it also owns upstream oil and gas exploration and production concessions in Australia, Southeast Asia and China.
The deal will be the first overseas acquisition of a public company by PetroChina, and the move to get downstream fuel production adds to efforts by Chinese oil majors to buy upstream oil exploration assets around the world to secure energy supplies.
Keppel, the world’s largest offshore oil rig builder, said in the statement that together with PetroChina it plans to explore opportunities in the offshore oil industry and in other areas. (Reporting by Eveline Danubrata; Editing by Kevin Lim and Lincoln Feast)