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Talking about this, a wild speculation is that while the Temasek backed entity buy up KOM' s legacy rigs and asscoiated receivables to form Asset co, they can also buy up the $1.1 billion rigs-secured receivables from SCM so SCM shareholders can get a big fat special dividend at the end of the rainbow. Of course 55% of that fat dividend payout would go back to Temasek.

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Borr Drilling Limited (BORR)

NYSE - NYSE Delayed Price. Currency in USD

Add to watchlist

4.0500+0.7000 (+20.90%)

At close: April 1 04:00PM EDT

A side show- Borr Drilling was up 20.9% on Friday US trade....shortly after they announced that they had raised about US$45 million via open market share sale this year, mainly to pay for the restructuring fee and accrued interest to refinance their debt owing to SCM and KOM.

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The Shortist or puppet master has likely covered about 30% of his massive 2 billion shares SCM short position over the past 1+ month. Another 70% more to go. A very painful period for him

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That sounds very space age and high tech....

Chagataii ( Date: 04-Apr-2022 10:56) Posted:

lol 😂 change name to Desmodeus marine

desmodeus ( Date: 04-Apr-2022 10:48) Posted:

don' t forget to change the name to something more space age to reflect technology, sembawang sound very obiang

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The JV company is talking about arrangement AFTER the merger, not ABOUT the merger.

ahbui8 ( Date: 02-Apr-2022 13:52) Posted:

Bro to me still a 50:50 lei, please enlighten me if I wrong. It' s clearly stated Keppel will hold 50% mean Keppel SH no matter what will get 50%. Combined entity hold another 50%, mean SM will pay a max of 500m to get KOM to become the combined entity.

To sweeten the deal unless TH come out with cash to get extra stake fm both JV. Example come out with 2B cash to get 10% fm Keppel and 10% fm the combined entity.

better ( Date: 02-Apr-2022 00:02) Posted:

Wrong, the merger term is not 50:50. Below is from 2021 memorandum of understanding.

Under the MOU between Keppel and Sembcorp Marine, it is envisaged that Keppel and the Combined Entity will enter into a strategic partnership, pursuant to which Keppel will hold 50% of a 50-50 joint venture that will be established between Keppel and the Combined Entity (Strategic Partnership JV). This would allow Keppel to continue accessing Keppel O& M&rsquo s capabilities required for its projects, on terms to be agreed. The scope of the Strategic Partnership JV will be subject to final agreement between the parties concerned. In addition, subject to regulatory review, the Combined Entity will be the preferred EPC partner for Keppel&rsquo s projects where the Combined Entity has the relevant expertise

The above is saying that after KC sold their yards and intellectual properties to SCM through the merger, Keppel corp will enter into a 50-50 joint venture with SCM (which will be then called the combined entity) so that if Keppel corp wants to build a offshore data centre for example, they will execute it through the joint venture company which SCM will be the preferred EPC partner if they have the relevant expertise

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1) Yes, SM will be the acquiring entity as it is already listed. Any other way will be much more complicated as you have to delist/ buyout SM and then list the combined entity again later after merger. Much too troublesome.

2) No newco need to be formed. After SM acquires KOM through issuing shares and maybe partial pay in cash, SM will be called the " combined entity" . However, the tabled merger deal needs to get the approval of KC and SM' s shareholders with Temasek having to abstain from voting. Temasek has to abstain from SM' s voting because they own 20% of KC. They must abstain from KC' s voting because they own 55% of SM. KC cannot keep SM shares and must distribute them to their shareholders as Temasek usually prefer direct shareholding vs grandfather/ Korean style shareholding. Like A owns 30% of B and 51% of C and C owns 21% of B, so A effectively has majority control of B (Korean style).

3) It is likely to involve $1-2 billion cash injection from Temasek, just a matter of how they are going to do it. 4 reasons for that:

a) To maintain their ownership of the combined entity at above 50%

b) Before KC transfer KOM' s assets to SM, they would very likely extract all the cash/ liquidity from KOM. KOM probably need about $1 billion cash/ running capital to see through their existing projects ex legacy rigs. If it is just a simple $2bil+ $4bil combination, the cash in SM will have to be used for the running capital of KOM existing projects. While that is possible, it might be a bit stretched and would not give the combined entity much room to mega projects.

c) On KC&rsquo s side, they need to pay off $4+billion of debt this year, most of them related to KOM. Without some cash on the table to sweeten the deal for KC and existing SM shareholders (with a special dividend of sort), the deal might not be approved during the voting.

d) SM is currently trading at below book value. KC will likely want to sell KOM at at least book value. That is an impasse for the merger. That means either SM have to issue a lot more shares to KC (SM share price being the exchange rate) or KC have to agree to sell KOM at below book value. As Temasek owns 55% of SM, it is of course to their interest to issue as little SM shares as possible to KC. The cash from Temasek can be used to repriced SM share price so the numbers can work out for both KC and SM shareholders. That&rsquo s my dominant merger scenario is some version of my original Option 2 scenario explained in my previous post

PHInsider63 ( Date: 02-Apr-2022 05:45) Posted:

Thanks bro better
Based on what was contributed and if those hold water, am I right to state:

1. SM will remain as the listco and the acquiring entity.
2. A newco aka Common Entity will be formed to merge KOM and SM assets under SM. In other words, SM will issue shares and or partial pay in cash to KC to buy KOM priced yard
3. Temasek May also inject cash into the newco / CE to take up a separate Stake in the newco / CE as their stake in SM will be diluted unless they inject cash directly into SM to prevent dilution.

better ( Date: 02-Apr-2022 00:02) Posted:

Wrong, the merger term is not 50:50. Below is from 2021 memorandum of understanding.

Under the MOU between Keppel and Sembcorp Marine, it is envisaged that Keppel and the Combined Entity will enter into a strategic partnership, pursuant to which Keppel will hold 50% of a 50-50 joint venture that will be established between Keppel and the Combined Entity (Strategic Partnership JV). This would allow Keppel to continue accessing Keppel O& M&rsquo s capabilities required for its projects, on terms to be agreed. The scope of the Strategic Partnership JV will be subject to final agreement between the parties concerned. In addition, subject to regulatory review, the Combined Entity will be the preferred EPC partner for Keppel&rsquo s projects where the Combined Entity has the relevant expertise

The above is saying that after KC sold their yards and intellectual properties to SCM through the merger, Keppel corp will enter into a 50-50 joint venture with SCM (which will be then called the combined entity) so that if Keppel corp wants to build a offshore data centre for example, they will execute it through the joint venture company which SCM will be the preferred EPC partner if they have the relevant expertise

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Got it, would reply tonight.

PHInsider63 ( Date: 02-Apr-2022 05:49) Posted:

Or will the following scenario be possible?
I agree that KC is rather desperate to rid the junk rigs.
They seem to be in a selling spree, the recent of which is Keppel Log.

PHInsider63 ( Date: 01-Apr-2022 18:41) Posted:

Thanks for the book values info. The numbers are impt.
Based on my understanding and prior knowledge in doing merger, albeit at smaller scale, the following should happen.
As stated and reiterated by the latest announcement, a Common Entity will be formed (or a Newco).

Based on book value of:
KOM 2b
SM 4b
A plain vanilla merger model will be 66.7% (SM) and 33.3% (KOM).

Which means Newco will be formed by 66.7% of SM shh and 33.3% of KC shh in which (as mentioned) KC will decide and intend to distribute to their shareholders.

If this happens, Temasek holding will be:

36.67% + 6.66% (20% original KC shares diluted accordingly) = 43.33%

KC shareholders may get a special dividends from sales proceeds of junk rigs from Asset CO (as mentioned in the announcement will be an external party).

So, assuming my stake is 15m shares, my shares will be folded to 10m shares. But with an enlarged CE, this will be a new landmark chapter.

Now if this happens, the price will be determined at existing book value of SM at 0.12. And the price needs to move up during this month.

Note. This is based on a plain Vanilla model. Of course M&A of this scale will be far more complex.

No matter what, KC and SM shh, all of us should have a truce because this will be a good news for all. Both parties will benefit. I expect small dividend from SM prior to merger on the region of 0.005 or $160 m. Temasek will get $88m. On the other hand, KC rid the problematic KOM and also stand to obtain dividends from sale of junk rigs to Asset co and shares of CE

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Regarding Keppel' s $3.2 billion worth of unsold/ legacy rigs, the plan is:

Keppel has also signed a non-binding MOU with Kyanite Investment Holdings Pte Ltd (Kyanite), a wholly owned subsidiary of Temasek, with a view to sell Keppel O& M& rsquo s legacy completed and uncompleted rigs and associated receivables to a separate Asset Co, which would be majority owned by external investors.

Under the second MOU, Keppel O& M& rsquo s legacy rigs and associated receivables will be sold to a separate Asset Co that will be formed. Keppel will retain not more than a 20% stake in Asset Co as an investment, while external investors, which Kyanite intends to procure, will hold the balance of at least 80%. Keppel will receive the consideration for the legacy rigs and associated receivables substantially in the form of credit notes. Asset Co shall be independently managed from the Combined Entity and the General Partner of this Asset Co will maintain, complete and monetise the rigs over time. Asset Co will enter into a service agreement with the Combined Entity for the completion of certain uncompleted rigs and the provision of other service.

The external investors will provide capital which can be used for finishing these uncompleted rigs, which would no longer be funded by Keppel. Keppel&rsquo s economic exposure in Asset Co will be reduced over time, as the rigs or Asset Co are sold or securitised when conditions in the rig chartering market improve.

Basically, Keppel is bleeding from having to complete these legacy rigs that they cannot sell and wants to quickly offload them with Temasek' s help.

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Wrong, the merger term is not 50:50. Below is from 2021 memorandum of understanding.

Under the MOU between Keppel and Sembcorp Marine, it is envisaged that Keppel and the Combined Entity will enter into a strategic partnership, pursuant to which Keppel will hold 50% of a 50-50 joint venture that will be established between Keppel and the Combined Entity (Strategic Partnership JV). This would allow Keppel to continue accessing Keppel O& M&rsquo s capabilities required for its projects, on terms to be agreed. The scope of the Strategic Partnership JV will be subject to final agreement between the parties concerned. In addition, subject to regulatory review, the Combined Entity will be the preferred EPC partner for Keppel&rsquo s projects where the Combined Entity has the relevant expertise

The above is saying that after KC sold their yards and intellectual properties to SCM through the merger, Keppel corp will enter into a 50-50 joint venture with SCM (which will be then called the combined entity) so that if Keppel corp wants to build a offshore data centre for example, they will execute it through the joint venture company which SCM will be the preferred EPC partner if they have the relevant expertise.

ahbui8 ( Date: 01-Apr-2022 19:07) Posted:

Bth both side, Keppel side expect 70:30 while SM side expect 67:33 😂

It' s clearly stated it' s will be 50:50 JV so it' s will be this way just like the MGO offer stated if really got MGO is at 8cts and is really happened offer at 8cts.

PHInsider63 ( Date: 01-Apr-2022 18:41) Posted:

Thanks for the book values info. The numbers are impt.
Based on my understanding and prior knowledge in doing merger, albeit at smaller scale, the following should happen.
As stated and reiterated by the latest announcement, a Common Entity will be formed (or a Newco).

Based on book value of:
KOM 2b
SM 4b
A plain vanilla merger model will be 66.7% (SM) and 33.3% (KOM).

Which means Newco will be formed by 66.7% of SM shh and 33.3% of KC shh in which (as mentioned) KC will decide and intend to distribute to their shareholders.

If this happens, Temasek holding will be:

36.67% + 6.66% (20% original KC shares diluted accordingly) = 43.33%

KC shareholders may get a special dividends from sales proceeds of junk rigs from Asset CO (as mentioned in the announcement will be an external party).

So, assuming my stake is 15m shares, my shares will be folded to 10m shares. But with an enlarged CE, this will be a new landmark chapter.

Now if this happens, the price will be determined at existing book value of SM at 0.12. And the price needs to move up during this month.

Note. This is based on a plain Vanilla model. Of course M&A of this scale will be far more complex.

No matter what, KC and SM shh, all of us should have a truce because this will be a good news for all. Both parties will benefit. I expect small dividend from SM prior to merger on the region of 0.005 or $160 m. Temasek will get $88m. On the other hand, KC rid the problematic KOM and also stand to obtain dividends from sale of junk rigs to Asset co and shares of CE

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Yes, that' s right.

Temasek would likely have to come out with some cash to avoid over dilution and to sweeten the merger deal....otherwise the proposal might not be able to get SCM and KC' s shareholders' approval.

MANFREDTMK ( Date: 01-Apr-2022 18:10) Posted:

For the second option, it appears to be a forward contract whose obligation becomes binding only after 2 years and will be redundant if prices rise above 20 cents then. This implies that we have to hold for at least 2 years if SM prices is trading below 20 cents. Is that what it meant?

MANFREDTMK ( Date: 01-Apr-2022 17:58) Posted:

If the first option is taken, TH effectively own 70% of SM and NEWCO becomes redundant

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Book value of about $4.7 billion after adding back the provision sounds about right.

PHInsider63 ( Date: 01-Apr-2022 15:52) Posted:

The Common Entity will be an unprecedented scale and significance.

Both KC and SM will benefit from it.
Total contracts expect to exceed S$10b.
Will become a mega yard of world class standard rivaling the leaders and potentially becoming World leaders and beaters.

A truce to supporter of SM and KC.

The next issue is the ratio of combination. I expect 50-50.

I need better to comment on this. Bro better
What is the net book value of KOM (after removing the gangrenous rigs)?
Book value of SM is about $4.67b right?

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Hahaha...you meant you JUST crossed 8 figures....that' s a bit slow.

weekaykee ( Date: 01-Apr-2022 21:38) Posted:

Me a sore loser? I am at complete peace with myself and my life . My nett worth recently crossed into 8 figures. Bulk of it properties based. Stock market just to kill time even though I am making a more than decent profit so far, mainly thanks to SCI.
Amusing myself in this thread with all you kiddos.

MANFREDTMK ( Date: 01-Apr-2022 14:45) Posted:

Everyone here already making money except you and you SORE LOSER, still have the audacity to teach us, WINNER, what to do. Beh pai sei, crocodile skin 🐊 🐊 🐊

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Notes about the merger:

The negotiation of the merger terms is between Temasek and Keppel corp. Temasek is the majority shareholders (55%) of SCM and obviously KC owns Keppel OM. Temasek in turn owns 20% of KC. If I am Temasek, there are 2 possible routes. First, Temasek can offer to give up their 20% KC shares to take over Keppel OM and then merge it with SCM at book value. Book value for Keppel OM (excluding cash holding) is about $2billion. SCM' s book value is about $4billion. In this case, Temasek will own 70% of SCM. This would be a non-cash transaction.

The second route is for Temasek to first offer to buy SCM shares that they do not already own in say 2 yrs time at 20 cents. As a majority shareholder, Temasek would not want to dilute its SCM shareholding by issuing excessive new SCM shares to KC. A future takeover offer similar to the one they made to KC 3 yrs ago would peg the exchange rate (SCM' s share price) at 20 cents and also allow KC to claim that they have sold Keppel OM at book value and not below. In this case, only about 10 billion new SCM shares need to be issued. Temasek can also offer to buy 5 billion new SCM shares at 20 cents, thus giving SCM $1 billion in cash to provide additional liquidity to SCM for continuing Keppel OM' s existing projects given that Keppel OM is going to be merged into SCM without any cash. I suspect about $1+ billion of the $3+ billion cash in KC' s book is currently used for Keppel OM' s running capital. KC also has $4+billion associated debt that is due this year. Although they do have the overdraft facilities to fund it, tapping their overdraft will incur a relatively high interest rate. The shares that KC receives will then be distributed to their shareholders which Temasek will receive 20%. Based on the above scenario, Temasek will own 52+% of SCM after merger.

Keppel OM' s unsold rigs/ legacy asset of about $3.2 billion will go into the asset co. and probably Temasek and other related investors will buy about 80% of it at maybe 10-20% discount off their book value.

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Tragic accident at Keppel' s yard.

Two workers die after accident at Singapore&rsquo s Keppel shipyard

Two workers died this week in an accident at a shipyard run by Singapore&rsquo s Keppel Corporation (SGX:BN4). The Bangladeshi men, aged 30 and 42, were reported to have fallen from a vessel in dry dock at a Tuas shipyard and were pronounced dead at the scene by paramedics.

By Energy Voice

01/04/2022, 1:02 am

Two workers died this week in an accident at a shipyard run by Singapore&rsquo s Keppel Corporation (SGX:BN4). The Bangladeshi men, aged 30 and 42, were reported to have fallen from a vessel in dry dock at a Tuas shipyard and were pronounced dead at the scene by paramedics.

They were among three men working on scaffolding on the vessel when the structure collapsed, Singapore&rsquo s Ministry of Manpower said.

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Good buy. The gap bas been filled. The resistance previously at 9.5 has become a strong support.

PHInsider63 ( Date: 01-Apr-2022 09:16) Posted:

I got today at 95.
Better got at 99 yesterday.
So?
Yet I follow him. I will and I shall. Because he provides substantiated facts.
No problem. Bullets and mortars ready.

weekaykee ( Date: 01-Apr-2022 09:10) Posted:

Yes follow " Better" who spent a long time nibbling at 16-20cts. So now you can nibble at 9.5cts all the way down to 4 cts or even zero

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I have a perpetual buy order at 9.4 queuing from last week. let's whether can get.

weekaykee ( Date: 01-Apr-2022 09:10) Posted:

Yes follow " Better" who spent a long time nibbling at 16-20cts. So now you can nibble at 9.5cts all the way down to 4 cts or even zero.

PHInsider63 ( Date: 01-Apr-2022 06:50) Posted:

Ok
Let it be stucked. I will nibble.

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More porridge, less monks.

Case made for imminent shipbuilding supercycle

March 31, 2022

0 2,169 2 minutes read

CSSC

Analysts at brokers BRS have posited that shipbuilding is closing in on the supercycle territory it last enjoyed in the first decade of the 21st century.

In BRS&rsquo s recently published, extensive annual markets report, the Paris-headquartered firm looks at the massive amount of container and LNG orders last year and the increasingly full-up nature of most Asian yards.

Containerships orders jumped by more than 300% in 2021, BRS data shows with container carrier orders surpassing bulker and tanker orders for the first time in history. On top of that, there were 86 large LNG carriers ordered in 2021, an all-time record.

As a result of the ordering frenzy, BRS stated this week that most Chinese yards are now full for the next three years, with the situation similar in South Korea.

Giving rationale to suggest that a new shipbuilding supercycle is looming, BRS pointed to the steep reduction in the number of shipyards in recent years, dropping from about 700 in 2007 to about 300 by 2021. This drop saw active global shipbuilding capacity contract so that about 1,200 to 1,300 vessels can currently be built and delivered every year compared with the capacity for the construction and delivery of 2,000 vessels in the years 2005 to 2010. 75% of the world shipbuilding production is now in the hands of just nine shipbuilding groups, BRS data shows.

Looking at the existing fleet, BRS suggested that there is a growing need to replace a large number of vessels delivered between 2005 and 2010.

&ldquo There is a need to replace non-eco vessels characterised by relatively large individual daily fuel consumptions that were built and delivered before 2010. This is required not only for the sake of competitiveness but also to meet stricter environmental regulations coming in,&rdquo BRS stated, listing the likes of EEXI, CII, AER and EEOI, all impending green restraints on thousands of ships trading today.

Giving evidence against the imminent supercycle argument, BRS went on to point out that the average age of ship demolition is well above 25 years, standing at 29 years for bulkers, 26 years for tankers and 29 years for container carriers.

&ldquo This therefore suggests that the new supercycle should not start before mid-2025,&rdquo BRS predicted.

Splash readers can access the full 150-page report, covering all shipping segments, by clicking here.

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In KC' s book, they have about $4-5 billion of debt associated with Keppel OM. The book value of their unsold or legacy rigs and associated receivables ($250 mil owed by Borr Drilling) add up to about $3.2billion which is the ' Asset Co" . The " Operating Co" which would be sold to SCM consists of the yards and associated intellectual properties which is valued at around $2 billion.

Keppel is keen to get rid of the unsold rigs but is unlikely to find buyers immediately unless they give a 30-40% discount. So, they told Temasek, &ldquo if you want to buy my yards and associated intellectual properties to merge with SCM, you have to help me find a solution to encash my unsold and fast depreciating rigs as well so I can pay off my $4-5 billion loan&rdquo . That' s why they keep repeating that encashing the unsold, and fast depreciating, rigs (shit) and the sale of the yards (jewel) must be done together.

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Next up is likely the mega delivery of the Energean FPSO for the Karish field. $300-400mil cash collection. Should be happenning in the next week or so....

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You beat me to the offer.

bystander1965 ( Date: 31-Mar-2022 17:08) Posted:

500k shares sgd5k u sell me, can? I can pay u 6k. Kekeke

TigerPlay ( Date: 31-Mar-2022 16:32) Posted:

I see I see. But if the 500k refer to the number of share, it interpret to $5,000.
But if 500k refer to $500,000, then is 5 mils share, which interpret to $50,000
Both is alot of money to me leh, maybe I am the super cheapo one lo

Borr Drilling Limited (BORR)

Two workers die after accident at Singapore&rsquo s Keppel shipyard

More porridge, less monks. Case made for imminent shipbuilding supercycle

More porridge, less monks.

Case made for imminent shipbuilding supercycle