Sembcorp Marine said the cash was used for working capital purposes as intended.

Sembcorp Marine (Sembmarine) has fully utilised the last $160 million of $600 million in cash proceeds raised from its $2.1 billion rights issue in 2020.

 

In a bourse filing to the Singapore Exchange on Tuesday morning (Sept 21), the group said the cash was used for working capital purposes as intended.

 

The bulk of it, or $66 million, was used to pay for subcontractors' labour services, while $58 million was deployed as payment for materials and equipment. The outstanding $36 million was used as payment for employees' payroll expenses.

 

Earlier in June, Sembmarine proposed another rights issue of up to 18.83 billion new shares at eight cents a share, based on three new shares for every two existing shares held.

 

This raised questions from the Securities Investors Association (Singapore), which questioned the group' s basis for its rights issue price and queried the total rights proceeds and utilisation of the $1.5 billion raised.

 

Sembmarine has clarified that net proceeds from the rights issue will not be used to fund the potential merger between Keppel O& M and Sembmarine. Instead, it intends to use proceeds from the 2021 rights issue to strengthen its balance sheet and to enhance its liquidity position resulting from the severe impact of Covid-19.

 

The group' s latest rights issue exercise closed on Sept 14 with valid acceptances for 15.9 billion or 84.2 per cent of the rights shares on offer. Excess applications were made for 6.3 billion rights shares, or 33.5 per cent of the total rights shares available.

 

Temasek will take up 49.3 per cent of the rights issue, which will raise the Singapore investment company' s stake in Sembmarine to 46.6 per cent from 42.6 per cent. It also means Temasek will need to make a compliance offer for all shares of Sembmarine that it does not already own.