Sembcorp Industries - OCBC Investment 2020-06-09: Separating From Marine

SEMBCORP INDUSTRIES LTD (SGX:U96) | SGinvestors.io SEMBCORP INDUSTRIES LTD (SGX:U96)

Sembcorp Industries - Separating From Marine

  • Supporting Sembcorp Marine’s rights issue.
  • De-merger later.
  • To be a more focused company.



Finally a big move related to marine



Details of Sembcorp Marine rights issue

  • A rights issue of up to 10.46b new Sembcorp Marine shares at an issue price of S$0.20 for each rights share has been proposed, on the basis of 5 rights shares for every one existing ordinary share. Gross proceeds are expected to be ~$2.1b (of which Sembcorp Industries is to subscribe up to S$1.5b of rights shares, and Temasek to subscribe for up to S$0.6b via a sub-underwriting arrangement with DBS).
  • The issue price of S$0.20 is at a 31% discount to the theoretical ex-rights price of S$0.29 as calculated based on the 5- day VWAP of S$0.74.


Approvals needed first

  • Sembcorp Industries and Sembcorp Marine will be seeking their respective shareholders’ approval for the Transaction at EGMs which are expected to be convened around end August / early September 2020. The rights issue is also conditional on Sembcorp Marine shareholders passing a resolution to waive their rights to receive a general offer from Temasek and its concert parties in connection with the Proposed Distribution, as Temasek may become a significant shareholder post the transaction.
  • Sembcorp Industries has given an undertaking to vote in favour of the rights issue resolution at Sembcorp Marine’s EGM. The Proposed Distribution and the rights issue are inter-conditional, and will only proceed if shareholder approvals are received for all resolutions at both companies’ EGMs.


Potential for Sembcorp Industries to re-rate






OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2020-06-09
SGX Stock Analyst Report HOLD MAINTAIN HOLD 2.00 UP 1.630



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