(Reuters) - Singapore's Keppel will spin off its data centre joint venture (JV) to unit Keppel DC REIT for a total gross divestment price of S$1.38 billion ($1.03 billion), the two companies said on Tuesday.
The JV between Keppel's Connectivity Division and Cuscaden Peak Investments owns the Keppel Data Centre Campus in Singapore, comprising two operational centres - KDC SGP 7 and KDC SGP 8.
Keppel's share of the total gross divestment price, which includes the estimated consideration for Keppel's 51% stake in the JV should the call option be exercised, will be about S$280 million.
Keppel DC REIT will have full ownership of data centres KDC SGP 7 and KDC SGP 8, while Keppel will maintain its operational and management roles for both, the companies said in a joint statement.
"These assets will not only enhance our portfolio's income resilience but also allow us to capture potential upside from rental uplifts and capacity expansion," Keppel DC REIT CEO Loh Hwee Long said.
The proposed acquisition will deliver strong positive cash flows and be immediately accretive to distribution per unit, Long said.
Separately, Keppel DC REIT said it was launching an equity fundraising placement aiming for about S$1 billion in proceeds, with each new unit priced between S$2.074 and S$2.128.
($1 = 1.3388 Singapore dollars)
(Reporting by Roushni Nair in Bengaluru; Editing by Subhranshu Sahu)
