Keppel, DBS and SingTel Join Forces to Form One of the Largest Listed Venture Capital Companies in Asia
SINGAPORE, JUNE 21 - Keppel Corporation said today it would re-organize listed subsidiary Keppel Marine as k1 Ventures Limited (k1), a venture capital company to invest and support innovative internet businesses in Asia and worldwide.
With an initial funding of about S$500 million, k1 Ventures will be the largest private equity vehicle in Singapore and one of the largest in Asia. Given its blue-chip shareholder base led by Keppel Corporation, DBS Bank (DBS), SingTel and strong management team, k1 Ventures aims to be a major player in the Asian venture capital landscape.
k1's focus will be based on geography, investment stage and industry. Most investments will be targeted in Asia, directed towards high growth technology companies requiring expansion and 'mezzanine' stage funding.
k1 Ventures will not only invest, but expects to offer strategic, operational and financial advice to firms in which it invests via strategic relationships. While Asia will be a prime focus, the company will also consider appropriate investments in other parts of the world.
The Company will issue up to 142 million new shares at S$1.55, to raise the total of up to S$220 million, which together with its existing cash reserve, will give it a cash fund of approximately S$500 million to embark on its new business.
Jardine Fleming Securities Limited has been appointed as placement agent to place up to 51.6 million new shares with a greenshoe option of an additional 12.9 million new shares.
DBS, Technopreneur Investments Pte Ltd, and SingTel Investments Pte Ltd have entered into Investment Agreements with the Company to subscribe for the total of 64.5 million new shares, and the Management Team together with some of the proposed Directors have agreed to subscribe for a total of 12.9 million new shares, all at the price of S$1.55 each.
k1 Ventures has brought on a separate and independent management team with experience in fund and asset management, management consulting and investment banking.
Lim Ho Kee, former Chairman of UBS Asia, will serve as Chairman and CEO of the new company. Lim has been actively investing in technology companies for the past six years, and serves on the boards of Singapore Telecom, Keppel TatLee Bank and Cycle & Carriage, amongst others.
Other key members of the management team include James Kralik, formerly of McKinsey & Company, who will lead k1 Ventures' operations in Greater China; Lee Keen Whye, a private equity specialist formerly with Government of Singapore Investment Corp. and Rothschild Ventures; Salman Khan, former banking analyst at Goldman Sachs; Sanjay Natarajan, formerly a leader of McKinsey & Company's SE Asia e-commerce practice; and Richard Toh, a former analyst and fund manager at Morgan Stanley Asset Management.
k1 Ventures' board of directors will comprise John T. Olds, Vice Chairman and CEO of DBS; Ang Kong Hua, President of NatSteel and Chairman of NatSteel Electronics; Choo Chiau Beng, Chairman and Managing Director of Keppel FELS Energy & Infrastructure; Jackson Tai, DBS' Chief Financial Officer and Senior Managing Director - Investment Banking Group; Teo Soon Hoe, Keppel Group Finance Director; and Wong Ngit Liong, Managing Director of the Venture Group. See Addendum 1 for CVs.
Lim Ho Kee, Chairman and CEO of k1 Ventures, said the establishment of the venture capital company comes at an exceptionally opportune time.
"k1 Ventures enters the investing scene at the 'right' time, with an array of 'right' opportunities and with the 'right' team balance. The time is right, as equity markets have corrected significantly, bringing valuations, especially among technology firms, to more realistic levels.
"The right opportunities are also there, as we believe that information technology and e-commerce will fundamentally change the Asian business landscape. We further believe that we have assembled a management team with the right balance of investing, consulting, research, investment banking and business management and development experience. This is an exceptionally capable management and operations team.
"Complementing all these factors is what we believe to be a superior model for long-term capital formation and value creation, and an organizational structure which offers us great flexibility.
"We think all this is a great combination, and we are excited to move forward," said Lim.
Keppel Group Chairman Mr Lim Chee Onn said, "The decoupling decision by Keppel is a significant boost for k1 Ventures. However, it will leverage the numerous platforms of the diverse Keppel Group.
"Through this strategic move, the Keppel Group of companies will have the advantage of not only co-investing in ventures relevant to their businesses but also enhancing their competitiveness through access to leading-edge technologies from firms in which k1 Ventures invests.
"In turn, Keppel's strategic business units with its large customer, accounts and supplier base will also provide a ready platform for start-ups to test and roll out their technology and processes. k1 Ventures will further develop a close synergistic working relationship with k1 e-Biz, where they will share deal flows in opportunistic investments," he added.
According to DBS' CEO John Olds, the Group is participating in k1 Ventures "primarily because it allows us to be a bigger player in a larger market quickly.
"The half-life of technologies is shrinking already," said Olds, "and investing in technology companies is no longer a "pick a card, any card" kind of investment. There will be winners and there will be losers, and we believe k1 Ventures, with an eye on technology as well as the region which in many respects is best able to apply it, will be in a better position than most to identify the winners early.
"We see as well clear benefits to investing in companies developing technologies which may be applicable in businesses such as ours. Being close to these firms and getting in on the ground floor can provide a significant competitive advantage to us," Olds said.
The new shareholders will subscribe for new shares to be issued pursuant to the private placement. To facilitate the private placement and future re-capitalisation endeavours, the company proposes to increase its authorised share capital from $200,000,000, divided into 400,000,000 shares of $0.50 each, to $1,000,000,000, divided into 2,000,000,000 shares of $0.50 each, and to amend its Memorandum. Each existing share will be subdivided from $0.50 par value to five shares of $0.10 each.
k1 Ventures has applied for tax exemptions under the Income Tax Act (the Approved Venture Capital Fund Incentive). When approved, the Company would enjoy exemption for ten years on the gains derived on disposal of approved investments and would be allowed to use tax-free profits to declare tax-exempt dividends.
The agreements and proposals will be subject to approval of the SGX, shareholders of Keppel Marine Industries Limited, and other relevant authorities. A circular will be issued to shareholders shortly.
Keppel Corporation, which together with its subsidiary Keppel FELS Energy & Infrastructure Ltd have a combined interest of 64% in the Company, and have undertaken to vote in favour of the passing of the resolutions at the forthcoming EGM of the Company.
ADDENDUM I
k1 Ventures Limited
Board of Directors
Lim Ho Kee - Chairman & Chief Executive Officer
Mr Lim graduated with a Bachelor of Science (Economics) degree from the London School of Economics in 1968. He started his career with Shell Eastern (Singapore) before embarking on an illustrious career in the banking sector in Singapore. He has held leadership positions in several local and foreign banks before becoming Chairman, Region East Asia, Union Bank of Switzerland ("UBS") in February 1997. In 1991, he had the distinction of being the first non-Swiss member of the Enlarged Group Executive Board of UBS.
Mr Lim is Chairman and Co-founder of Sanctuary Asset Management Pte Ltd and Kenrich Partners Pte Ltd. He is also active as an investor in start-ups and expansion firms as an angel investor. Mr Lim sits on the Board of several companies including Singapore Telecommunications Ltd, Singapore Post, Cycle & Carriage Ltd, Keppel TatLee Bank Limited and Belgacom, S.A. Mr. Lim is also the Vice-Chairman of the SIM Governing Council and the Chairman of the SMU Finance Committee.
Ang Kong Hua
Mr Ang is President of NatSteel Ltd ("Natsteel"), a Singapore listed manufacturing group with core businesses in steel, building materials and electronics. As the Chief Executive Officer of NatSteel since 1975, he has been responsible for the growth of Singapore's only steelmaker into one of the country's leading multi-industry groups with 12,000 personnel and businesses spanning 15 countries, mainly in the Asia Pacific. Mr Ang also serves on the Boards of various listed and private companies as well as a number of government and advisory institutions.
Mr Ang graduated from the University of Hull, United Kingdom, with a Bachelor of Science (Economics) Upper II Honours degree in 1966. He was with the Economic Development Board, Singapore and DBS Bank Ltd before joining NatSteel.
Choo Chiau Beng
Mr Choo Chiau Beng, is Chairman and Managing Director of Keppel FELS Energy & Infrastructure Ltd and he is also the Executive Director of Keppel Corporation Limited.
Mr Choo started his career with Keppel Shipyard in 1971 and in addition to his appointment as Naval Architect, he was appointed as Executive Director of Singapore Slipway in 1973. In 1995, he was seconded to Keppel Philippines Inc in Philippines to take up the position of Executive Vice President and Director for a period of four years. He joined Keppel FELS (formerly known as Far East Levingston Shipbuilding Ltd) in 1980 as an Assistant General Manager and he was appointed as a Director of the Company. He was promoted to Deputy Managing Director in November 1981 and Managing Director in March 1983. In 1994, he was appointed Chairman of Keppel FELS Ltd. Keppel FELS Energy & Infrastructure Ltd was formed when Keppel FELS Ltd and Keppel Integrated Engineering Ltd were merged in March 1999.
He is Director of Keppel TatLee Bank Limited, Keppel Land Limited and Pacven Walden Management Pte Ltd. Currently, Mr Choo is the Chairman of Singapore Petroleum Company Limited. He is also the Chairman of Ngee Ann Polytechnic Council.
Mr Choo obtained his High School Certificate in 1966 and was awarded the Colombo Plan Scholarship to read Naval Architecture in the United Kingdom. He obtained his Bachelor of Science (1st Class Honours) in 1970, and Master of Science in 1971. In 1982, he attended the PMD in Harvard Business School.
John Olds
Mr Olds is Director, Vice Chairman and Chief Executive Officer of DBS Bank and DBS Group Holdings. Prior to joining DBS, he was Managing Director of J.P. Morgan & Co., Inc. ("JP Morgan") at the time of retirement at end 1997. Mr Olds joined JP Morgan in New York in 1973 after serving in the financial community in New York, London and Paris. After heading various departments and the Singapore office, he was appointed Executive Vice President and Head of the bank's business in the Asia-Pacific region in 1983.
In 1987, he was given responsibility for the development of JP Morgan's global securities business and in 1991, he was appointed head of Euroclear, the world's largest securities clearing and settlement system, while co-ordinating the firm's European operations.
Mr Olds currently serves as advisory board member of INSEAD and director of The Board of Commissioners of Currency of Singapore, Civil Service College and Singapore International Chamber of Commerce. He graduated from the University of Pennsylvania with a Bachelor of Arts degree in 1965.
Jackson Tai
Jackson Tai is the Chief Financial Officer of DBS Bank and a member of the firm's Corporate Office. Until July 1999, Mr Tai was a managing director of J.P. Morgan & Co, where he completed 25 years of service, including as the head of Asia Pacific and as the senior officer of the Western United States. Mr Tai joined J.P. Morgan in 1974 immediately after receiving an M.B.A. from Harvard University, where he was a recipient of a Sloan COGME fellowship. He received a B.S. degree from Rensselaer Polytechnic Institute, which he attended under a scholarship grant.
In April 1996, Mr. Tai was appointed to the 17-member White House Commission on United States-Pacific Trade and Investment Policy. Mr Tai is also a Board Member of the Singapore Productivity and Standards Board, the Bank of the Philippine Islands, the BPI Capital Corporation and DBS Land Ltd.
Teo Soon Hoe
Mr Teo is the Group Finance Director of Keppel Corporation Ltd.
He is also a director and member of the Executive Committee of Keppel TatLee Bank Limited and Chairman of Keppel Telecommunications & Transportation Ltd, Keppel TatLee Finance Ltd, Keppel Insurance Pte Ltd, DataOne Corporation Pte Ltd, Keppel IVI Investments Inc, Keppel Monte Bank, Inc, Keppel Philippines Holdings Inc and Keppel Securities Philippines Inc.
Mr Teo serves on the boards of Keppel Land Ltd, Keppel FELS Energy & Infrastructure Ltd, Keppel Hitachi Zosen Ltd, Keppel Philippines Marine, Inc, MobileOne (Asia) Pte Ltd and Singapore Petroleum Company Limited. He graduated with a degree in Business Administration from the University of Singapore in 1972.
Wong Ngit Liong
Mr Wong is the Managing Director of the Venture Manufacturing Group, which he nurtured from the start-up phase. As President and Chief Executive Officer, he is responsible for the overall growth and development of the Group's businesses.
Prior to Venture Manufacturing, Mr Wong spent more than 12 years with Hewlett-Packard Company ("HP") in various management positions at headquarters in Palo Alto, HP Singapore and HP Malaysia. He was the General Manager of two product divisions in HP Singapore when he left HP for a business and entrepreneurial career.
Mr Wong holds a 1st Class (Honours) Degree in Electrical Engineering and a Master of Science (Electrical Engineering) degree from the University of California at Berkeley where he was a Fulbright Scholar and a Master of Business Administration degree holder with distinction from McGill University under the Canadian Commonwealth Fellowship.
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