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SembCorp Marine- The new Frontier.
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Calmroom
Master |
07-Jul-2021 22:17
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My favourite part is no $500m " wedding dowry" for Keppel. Lol...
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Goldfinger
Supreme |
07-Jul-2021 21:45
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This is actually good news for SembMarine.
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ADS2200
Veteran |
07-Jul-2021 21:10
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Improper to link rights issue to potential merger of Sembmarine, Keppel O& MWE were taken aback by Ben Paul' s article " Is Sembmarine' s rights issue to position it for a cash-depleting merger with Keppel O& M?" , where he incorrectly suggested that the transaction benefits Temasek at the expense of minority shareholders of Sembcorp Marine (Sembmarine). This is largely because he linked Sembmarine' s S$1.5 billion rights issue with the potential combination between Sembmarine and Keppel O& M. The 2021 rights issue of Sembmarine and potential combination between Sembmarine and Keppel are two independent transactions. In the 2021 rights issue, Sembmarine reaffirmed that the recapitalisation was needed to strengthen its balance sheet and to enhance its liquidity position resulting from the severe impact of Covid-19. This will better position it to bid for larger projects and accelerate its pivot into the fast-growing renewable and clean-energy segment. The 2021 rights issue is subject to the approval of Sembmarine' s shareholders, and is independent of the outcome of the discussions on the potential combination. Temasek views this 2021 rights issue to be in the best interests of Sembmarine. Temasek also has an interest in catalysing transition to a carbon-neutral world. Thus, we have undertaken to subscribe for our pro-rata entitlements to the 2021 rights issue, plus excess rights not taken up by other shareholders, up to 67 per cent of the 2021 rights issue in aggregate. DBS has separately underwritten the remaining 33 per cent. This means Sembmarine will have certainty that it can raise the full S$1.5 billion it requires. This is different from the transactions last year, where there was a proposal to demerge Sembmarine from its parent, Sembcorp Industries, along with a rights issue by Sembmarine that injected S$600 million of working capital, and retired a S$1.5 billion loan from its parent. The vast majority of shareholders of both companies voted for the transactions at their respective extraordinary general meetings in August 2020. Temasek, too, saw the 2020 rights issue as being in the best interest of Sembmarine, and its demerger from Sembcorp Industries, as being in the best interests of both companies. Temasek became a 42.6 per cent shareholder in Sembmarine after the resulting demerger from Sembcorp Industries. We received a proportionate share of Sembmarine shares, like other Sembcorp Industries shareholders. In addition, we acquired 8.2 per cent of Sembmarine through the rights issue at S$0.20 per share - the same price paid by every other subscriber. As Sembmarine and Keppel have announced, discussions about their potential combination are at a very preliminary stage. If there is a definitive agreement on this, shareholders of both companies will then be asked to consider and vote on it separately. As outlined by Keppel and Sembmarine on their discussions, it is the combined entity that would pay the consideration of up to S$500 million to Keppel from the combined asset base of Keppel O& M and Sembmarine, not just SembMarine' s, should the potential combination be approved. It is not correct to say that the proposed 2021 rights issue is to provide those funds to pay Keppel. In short, the upcoming 2021 rights issue and potential combination are independent transactions, which will be separately and independently subject to shareholder votes. It is improper to suggest that these are part of a corporate exercise to benefit Temasek at the expense of minority shareholders of Sembmarine. Nagi Hamiyeh Joint head, investment group head, Portfolio Development Temasek |
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ADS2200
Veteran |
07-Jul-2021 21:02
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Oh really .... I think otherwise. Fresh funds are coming big waves. Temasek is watching. We should be seeing further movement. https://bt.sg/4FbM LETTER TO THE EDITOR
Proposed rights issue needed to preserve shareholder value: SembmarineWE refer to The Business Times article " Is Sembmarine' s rights issue to position it for a cash-depleting merger with Keppel O& M?" written by Ben Paul and published on July 5, 2021, and would like to provide some clarifications to your readers. On June 24, we made two announcements. The first announcement relates to a rights issue aimed at addressing the company' s immediate funding needs and strengthening its financial position to accelerate our expansion into the renewable and clean energy space. The second announcement relates to a non-binding memorandum of understanding that we have signed with Keppel Corporation to explore the potential combination of Sembcorp Marine and Keppel Offshore & Marine (Keppel O& M). Your article states that " the rights issue will probably also position Sembmarine for a potentially cash-depleting merger with Keppel O& M" . These two announcements are independent of each other. The rights issue will address a critical funding need that will see us through till end 2022. A potential combination addresses a longer-term goal to better position Sembcorp Marine to compete and thrive on a global stage in the new energy sector. We would like to emphasise that the entire amount to be raised from the rights issue will be used for our working capital and general corporate purposes, including debt servicing. For the avoidance of doubt, the net proceeds from the rights issue will not be used to fund any payment in relation to the potential combination. We are fully mindful that the proposal to raise S$1.5 billion through a fully committed, renounceable rights issue comes after an earlier S$2.1 billion rights issue in September last year. However, this new rights issue is critical as our operations have been severely impacted by the continuing Covid-19 disruptions. Given the challenges, it is vital that we strengthen our balance sheet once again, and enhance liquidity to meet projected operational funding needs, including replenishing our working capital. We hope that our shareholders will understand that this proposed rights issue is needed to preserve longer-term shareholder value. On the potential combination with Keppel O& M, while there were no conversations about this in August 2020, the board and management are of the view that there could be significant benefits for our shareholders in exploring the potential combination. We would also emphasise that discussions are at a preliminary stage and there is no certainty that the potential combination will take place. If an agreement is reached, a separate extraordinary general meeting will be held to seek shareholders' approval. We are thankful for our shareholders' understanding over the years, and we look forward to their continued support. Thank you for the opportunity to provide this clarification. Chua Mun Yuen Head, investor relations and corporate communications Sembcorp Marine |
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Calmroom
Master |
07-Jul-2021 19:33
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Oic, no wonder the " selling" looked so abnormal... This kind of BB tactic quite effective if the intention is to " paralyze" the share price for almost an entire trading day. If BB keeps repeating this strategy between 12.2c to 12.4c, then very hard for the price to break above the official TERP. Like this, BB can keep sentiment bearish and more easily influenced by any negative analyst report, opinion article and maybe even negative forum comments. Bad bad BB. 
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naoshingo
Elite |
07-Jul-2021 18:28
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Quite interesting...there is no mention of net sell of SM from institution and retailers from sgx report...
I don't believe there wasn't any major sellers last week. |
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Yatsa13
Veteran |
07-Jul-2021 18:08
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wkk, thanks. what you said brought forward an important aspect, with the merger it does not matter kom or smm anymore. The opinion of the international market deemed it " Singapore Super-contractor" - One Entity. meaning the future success rate of ks marine is greater. those who believe the price will go below 8c or underscribed. well, i am not sure. it is a merger of bases, technology, skill-set and all. OPINION: Keppel O& M and Sembmarine merger could create Singapore super-contractorhttps://www.upstreamonline.com/opinion/opinion-keppel-o-m-and-sembmarine-merger-could-create-singapore-super-contractor/2-1-1032397
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Yatsa13
Veteran |
07-Jul-2021 17:43
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thanks for the video. unlike many who try to project a doom and gloom future of smm. your observation maybe right. vol of buy up than selldown. some call it distribution, to me it is accumulation. om industry is booming.
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weekaykee
Master |
07-Jul-2021 15:43
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Based on the success rate of contract wins, agree that KOM CEO should take over the merged entity.
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kt3152
Supreme |
07-Jul-2021 15:43
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BB will throw and buy back same price. So it is unlikely sell down 79m. The buy up an sell down diff is about 9m for 122....
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dcproperty
Senior |
07-Jul-2021 15:27
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We never know. Maybe Keppel O & M' s CEO is taking over upon merging... lol |
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mrwonderful
Veteran |
07-Jul-2021 15:07
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The main issue with SCM is poor management. This has been proven by years and years of poor profit margins and high costs, compared to Keppel O& M. As long as the original and inept SCM management is still there, SCM is a dead company. No matter how much money you throw at it, no matter how good the O& M industry is, no matter if oil price is at $100. Furthermore all this rights exercise, merger, financial uncertainty (possibility of takeover) will definitely scare off some clients. But I think from Temasek POV, it' s a necessity. If delay, may be too late already. But yeah, Temasek should sack all the SCM management ASAP and replace with tried and tested business people. |
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Stocky901
Supreme |
07-Jul-2021 15:02
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Ezion is a classic joke from temasek. 🤢 🤢
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ckmpd1
Supreme |
07-Jul-2021 14:59
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well said. Dont listen to rumours here. Everyone must own due diligence. Trade according to what you believe
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TigerPlay
Master |
07-Jul-2021 14:42
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Agreed. Believe in yourself, if you think this fella worth keeping and got potential, keep and wait lor, if not sell lor. Remember back a year ago, when this fella was heading down towards 11 cts and hit 11.3cts,many will shout 5cts coming, throw throw. This type of thing can affect pp one, if you believe them and throw..then lan lan liaow when it bouces back to 22cts lor. But wat if it really hit 5 cts, how? So, in short believe in yourself lor.
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Isolator
Supreme |
07-Jul-2021 14:41
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x 0
x 1 Alert Admin |
Long to enjoy.. | ||||
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weekaykee
Master |
07-Jul-2021 14:39
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x 0 Alert Admin |
7 out of 10 times brokers are proven wrong.
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Calmroom
Master |
07-Jul-2021 14:25
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Sellers would rather throw down 79m shares at 12.2c than let the price rise by one bid. Previously they threw down more than 120m shares at 12.2c ( and only at 12.2c ). So same move today? Shake head... |
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Isolator
Supreme |
07-Jul-2021 14:20
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Long to enjoy... | ||||
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tonyja
Elite |
07-Jul-2021 13:33
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WITH the global rollout of Covid-19 vaccines, coupled with Opec+' s tight grip on oil supplies, UOB Kay Hian analyst Adrian Loh expects global oil demand to recover and lift the offshore marine industry, albeit at a " snail' s pace" . In a report on Wednesday, he noted that oil prices have trended towards US$80 per barrel as vaccinations in the past six months have allowed global oil demand to recover. Already, the US Energy Information Administration expects oil demand to rise by 5.4 million barrels per day and 3.65 million barrels per day in 2021 and 2022 respectively. Furthermore, Mr Loh expects that oil prices may hit US$100 per barrel sooner than the two years that was previously predicted due to a lack of exploration capital expenditure in the past five years. In the short term, the spat between Opec+ members has also caused oil prices to rally. " Thus, any incremental oil supply can only happen after the August OPEC meeting, and a stronger oil price would be well supported in the near term, with small-cap upstream stocks such as Rex International and RH Petrogas being potential beneficiaries," Mr Loh said. This has potentially helped the marine offshore sector undergo a nascent recovery, as seen in the number of offshore rigs and competitive utilisation that have continued to recover. Utilisation of semi-submersibles and drillships has risen between 8-24 per cent since the start of the year, while day rates for jack-ups have increased by 15 per cent and mid-water semis have increased by 22 per cent in the same period. As such, Mr Loh maintains market weight on the sector and a " buy" on Sembcorp Industries Sembcorp Ind , Yangzijiang Shipbuilding (YZJ) YZJ Shipbldg SGD and Keppel Corp Keppel Corp with target prices of S$2.59, S$1.90 and S$6.37, respectively. Looking at Keppel, Mr Loh forecasts that the company will generate S$3.4 billion in revenue, up 7 per cent year on year (yoy) and S$270 million in net profit. These could be affected by contributions from the new Marina East desalination plant, comments on the progress of its O& M divestment to Sembcorp Marine and its China property outlook. Shares of Keppel were trading at S$5.30, down 2.2 per cent or S$0.12 as at the midday break on Wednesday. As for Sembcorp Industries, Mr Loh predicts that it will see an 11 per cent rise in revenue yoy to S$2.9 billion in the first half of 2021 and net profit before exceptional items to be up 4 per cent yoy to S$170 million. The company' s divestment plans for its thermal assets, how well its floating solar plant startup does in Q3 this year, progress on its revenue on equity expansion and debt levels could potentially affect these forecasts. Shares of Sembcorp Industries were trading 0.9 per cent or S$0.02 lower at S$2.16 as at the midday break on Wednesday. As for Yangzijiang, he predicts that the company will generate revenue of 5.4 billion yuan (S$1.1 billion) in Q2 this year, up 12 per cent yoy, and net profit of 754 million yuan, down 4 per cent over the same period. " While we remain positive on the company' s shipbuilding business with gross profit margins likely to expand quarter on quarter and y-o-y, there is less certainty around the company' s trading business which experienced soft conditions in Q1 2021," Mr Loh said. Yangzijiang shares were up 0.7 per cent or S$0.01 at S$1.44 as at the midday break on Wednesday. Meanwhile, the analyst also maintained a " hold" call on Sembcorp Marine Sembcorp Marine as he acknowledged that the market will be less focused on the company' s results but instead focus on its merger with Keppel Offshore & Marine. As at the midday break on Wednesday, Sembmarine shares were down 1.6 per cent or 0.2 Singapore cent at 12.2 cents. |
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