Past 2 weeks, there were rumours of Keppel Infrastructure Trust (KIT) and CitySpring Infrastructure trust (CIT) merging. The rumours turned out to be true when KIT will issue new units to CIT. CIT will pay out to their shareholders a one time distribution of 1.98 cents per unit. There after, all unit holders will receive 1.05 cents per unit held.
To complicate matters, the new entity, which will be called Keppel Infrastructure Trust, will call a rights issue to purchase a 51% stake in Keppel Merlimau Cogen which owns a 1300MW power generation facility on Jurong Island.
This is complicated. Perhaps more so to yield investors.
The two managers on both KIT and CIT tried to work out a deal that to both shareholders looks yield accretive on paper. Then they shoved one existing Keppel asset down shareholder’s throat.
