Sembcorp Marine - OCBC Investment 2020-06-09: Finally Some New Developments

SEMBCORP MARINE LTD (SGX:S51) | SGinvestors.io SEMBCORP MARINE LTD (SGX:S51)

Sembcorp Marine - Finally Some New Developments

  • Sembcorp Marine announced 5 for 1 rights issue at S$0.20 issue price.
  • 31% discount to TERP of S$0.29 (based on 5-day VWAP of S$0.74).
  • De-merger with parent later.



Raising funds; demerger



Details of Sembcorp Marine rights issue

  • A highly dilutive 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.


Shareholding structure



Change of control






OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2020-06-09
SGX Stock Analyst Report SELL DOWNGRADE HOLD 0.55 DOWN 0.750



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