Introductory Document Dated 31 May 2010
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FOR INFORMATION ONLY This document is important. If you are in any doubt as to the action you should take, you should consult your (a business trust constituted on 23 July 2009 under the laws legal, financial, tax or other professional adviser. of Singapore and managed by Keppel Infrastructure Fund Management Pte. Ltd. as trustee-manager of K-Green Trust (“Trustee-Manager”), a wholly-owned subsidiary of Keppel Integrated Engineering Limited (“Sponsor” or “KIE”) K-Green Trust (“KGT”) is a business trust registered (with registration number 2010002) on 27 May 2010 under the Business Trusts Act (Chapter 31A) (“BTA”) Introductory Document Dated 31 May 2010 INTRODUCTION OF K-GREEN TRUST TO THE MAIN BOARD OF SINGAPORE EXCHANGE SECURITIES TRADING LIMITED This Document is issued by the Trustee-Manager in connection with the listing of units representing undivided interests in KGT (“Units”) on Singapore Exchange Securities Trading Limited (“SGX-ST”) by way of an introduction (“Introduction”). This Document provides information on KGT and the Units in compliance with the listing requirements of the SGX-ST. An application has been made to the SGX-ST for permission to list on the Main Board of the SGX-ST all the Units in issue immediately prior to the date of the commencement of dealing in the Units on the SGX-ST (“Listing Date”) and all the Units which may be issued to the Trustee- Manager from time to time in full or part payment of the fees payable to the Trustee-Manager. Such permission will be granted when KGT has been admitted to the Official List of the SGX-ST. KGT has received a letter of eligibility from the SGX-ST for the listing and quotation on the Main Board of the SGX-ST of all the Units in issue immediately prior to the Listing Date and all the Units which may be issued to the Trustee-Manager from time to time in full or part payment of the fees payable to the Trustee-Manager. The Units will be traded on the Main Board of the SGX-ST in Singapore dollars. KGT’s eligibility to Keppel Infrastructure Fund Management Pte. Ltd. list on the Main Board of the SGX-ST and its admission to the Official List of the SGX-ST are not to be taken as an indication of the merits of the (Company Registration No: 200803959H) Introduction, the Units, KGT or the Trustee-Manager. The SGX-ST assumes no responsibility for the correctness of any statements or opinions (Trustee-Manager for K-Green Trust) made or reports contained in this Document. There is no offering of any of the Units in connection with the Introduction in Singapore or elsewhere and recipients of this Document and all 2 Corporation Road #02-07 prospective investors in the Units should not take the Introduction or this Document to be an offer of, or an invitation to purchase, any Units. Corporation Place This Document is not a prospectus under Singapore law and has not been lodged with or registered by the Monetary Authority of Singapore (“MAS”). Singapore 618494 References in this Document to “herein” or “this document” shall be construed as being references to this Document. Tel: (65) 6499 0599 Fax: (65) 6265 1953 Issue Manager Email: [email protected] TABLE OF CONTENTS PAGE GENERAL NOTICE ....................................................... iv IMPORTANT NOTICE TO CPFIS INVESTORS .................................... vi DISTRIBUTION AND SELLING RESTRICTIONS ................................... vii FORWARD-LOOKING STATEMENTS .......................................... viii CERTAIN DEFINED TERMS AND CONVENTIONS ................................. ix CORPORATE AND OTHER INFORMATION ..................................... x SUMMARY ............................................................. 1 RISK FACTORS .......................................................... 15 OWNERSHIP OF UNITS ................................................... 32 DISTRIBUTIONS ......................................................... 34 CAPITALISATION AND INDEBTEDNESS ........................................ 36 UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AS AT THE LISTING DATE .. 37 PROFIT AND CASH FLOW FORECAST AND PROFIT AND CASH FLOW PROJECTION ...... 40 FACTORS AFFECTING RESULTS OF OPERATIONS AND DISCUSSION OF LIQUIDITY AND MARKET RISK ......................................................... 55 RESTRUCTURING EXERCISE ................................................ 59 K-GREEN TRUST ......................................................... 64 OVERVIEW............................................................ 64 STRUCTURE OF KGT .................................................... 65 KEY INVESTMENT HIGHLIGHTS ............................................ 65 BUSINESS STRATEGY .................................................... 69 COMPETITION ........................................................ 72 HEDGING POLICY ...................................................... 72 THE PORTFOLIO OF KGT .................................................. 73 OVERVIEW ........................................................... 73 GENERAL PROCESSES OF A WASTE INCINERATION PLANT ....................... 74 GENERAL PROCESSES OF A NEWATER PLANT ................................ 76 SENOKO PLANT ....................................................... 76 TUAS DBOO PLANT .................................................... 82 ULU PANDAN PLANT ................................................... 88 i ENVIRONMENTAL, HEALTH AND SAFETY PROCEDURES ......................... 92 INSURANCE .......................................................... 93 PROPERTIES .......................................................... 93 CERTAIN AGREEMENTS RELATING TO KGT .................................... 95 ROFR DEED ........................................................... 95 CONTRACTUAL ARRANGEMENTS RELATING TO THE RESTRUCTURING EXERCISE ..... 98 CONTRACTUAL ARRANGEMENTS RELATING TO SENOKO PLANT .................. 104 CONTRACTUAL ARRANGEMENTS RELATING TO TUAS DBOO PLANT ............... 114 CONTRACTUAL ARRANGEMENTS RELATING TO ULU PANDAN PLANT .............. 123 THE “GREEN” INFRASTRUCTURE SECTOR INDUSTRY ............................. 131 THE TRUSTEE-MANAGER OF KGT ........................................... 173 TRUSTEE-MANAGER .................................................... 173 FEES AND EXPENSES PAYABLE TO THE TRUSTEE-MANAGER OF KGT ............... 174 DIRECTORS ........................................................... 177 EXECUTIVE OFFICERS ................................................... 184 MANAGEMENT REPORTING STRUCTURE OF THE TRUSTEE-MANAGER .............. 187 REMUNERATION OF DIRECTORS AND EXECUTIVE OFFICERS OF THE TRUSTEE-MANAGER . 188 EMPLOYEES .......................................................... 188 CONSTITUENT DOCUMENTS OF THE TRUSTEE-MANAGER ....................... 189 OTHER RIGHTS AND OBLIGATIONS OF THE TRUSTEE-MANAGER .................. 190 CORPORATE GOVERNANCE ................................................ 194 COMPOSITION OF THE BOARD ........................................... 194 INDEPENDENCE OF DIRECTORS ........................................... 194 RESPONSIBILITY OF THE BOARD OF DIRECTORS .............................. 196 DEALINGS IN UNITS .................................................... 197 AUDIT COMMITTEE, NOMINATING COMMITTEE, REMUNERATION COMMITTEE AND CONFLICTS RESOLUTION COMMITTEE .................................... 197 THE SPONSOR .......................................................... 202 INTERESTED PERSON TRANSACTIONS AND POTENTIAL CONFLICT OF INTERESTS ...... 205 PAST INTERESTED PERSON TRANSACTIONS................................... 205 PRESENT AND ONGOING INTERESTED PERSON TRANSACTIONS .................. 207 FUTURE INTERESTED PERSON TRANSACTIONS ................................ 210 GENERAL MANDATE FOR INTERESTED PERSON TRANSACTIONS .................. 211 REVIEW PROCEDURES FOR NON-MANDATED INTERESTED PERSON TRANSACTIONS . 222 POTENTIAL CONFLICT OF INTERESTS ....................................... 223 THE CONSTITUTION OF KGT ............................................... 225 ii TAXATION ............................................................. 234 CLEARANCE, SETTLEMENT AND TRADING ..................................... 238 GENERAL AND STATUTORY INFORMATION .................................... 240 EXPERTS .............................................................. 245 GLOSSARY OF TECHNICAL TERMS ........................................... 246 DEFINITIONS ........................................................... 247 APPENDIX A — KEPPEL CORPORATION LIMITED’S DISTRIBUTION ............... A-1 APPENDIX B — INDEPENDENT REPORTING ACCOUNTANTS’ REPORT ON THE UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AS AT THE LISTING DATE ....................................... B-1 APPENDIX C — UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AS AT THE LISTING DATE ....................................... C-1 APPENDIX D — INDEPENDENT REPORTING ACCOUNTANTS’ REPORT ON THE PROFIT AND CASH FLOW FORECAST AND PROFIT AND CASH FLOW PROJECTION ........................................... D-1 APPENDIX E — INDEPENDENT TAXATION REPORT ........................... E-1 APPENDIX F — INDEPENDENT VALUATION SUMMARY LETTER ................. F-1 APPENDIX G — INDEPENDENT CONTRACTS REVIEW LETTER ................... G-1 APPENDIX H — LETTER FROM THE INDEPENDENT FINANCIAL ADVISER .......... H-1 APPENDIX I — LIST OF PRESENT AND PAST PRINCIPAL DIRECTORSHIPS OF DIRECTORS AND EXECUTIVE OFFICERS OF THE TRUSTEE-MANAGER ........... I-1 iii GENERAL NOTICE KGT has received a letter of approval each from the National Environment Agency