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| 10-Jun-2020 12:40 |
Seatrium
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Sembmarine
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I have recently purchased around $500k worth of Sembcorp marine shares at around $0.69 average. Likely to buy more in the coming weeks. There are selling pressure coming from likely fund managers/ institutions who want to sell. There are also investors like me who want to buy. They are still accumulating Sembcorp marine shares now to vote against the rights issue, which is what I will be doing as well. First, Sembcorp marine is in not danger of going under. They have a $2billion surbodinated loan from SCI. They have used $1.5billion to rollover expiring loans and can still tap another $500mil for running capital. They have secured another $500mil revolving credit from Standard Chartered which they can tap on anytime as long as SCI have at least 50% share holding (currently at 61%) in Sembcorp marine. With close to $1billion cash at their disposal, survival for the next few years in not in question. Second, oil prices have rebounded to $40 per barrel and is likely to end the year above $50. These should be supportive of Capex spending and Semb corp marine should be in a good position to capture a big slice of the pie as many of its comnpetitors ahve either gone under or are in far worse shape. Third, Singapore is going into phase 2 soon and the yards are going to be operating as normal. So, the smart investors are accumulating Sembcorp marine shares to ensure that they have enough shares to vote against the dilutive rights issue by cunning Temasek holding who wants to win big at the expense of minority share holders of Sembcorp marine. After voting down the rights issue, Sembcorp marine share price is likely to recover to above $2 in the next 2yrs with the rebound in oil prices as the global economy recovers. As it is, China is buying record amount of crude in anticipation of recovery in energy demand. |
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