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ocbc buyers fight back from the shortists
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arctician1982
Senior |
15-Jun-2020 19:59
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2 separate EGM, i belive after this right issue is passed any privatization offer or offer by keppel will need subsequent vote again
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Biffeen123
Member |
15-Jun-2020 18:15
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Want or not I sell to you lah!
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Biffeen123
Member |
15-Jun-2020 18:13
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Naked shorted at 0.56 100 lots. Tmr going down will take more profit $$$. | ||||
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gravity8888
Supreme |
15-Jun-2020 16:59
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Buy tomorrow bteer.. Can get 50 ctd | ||||
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Hector
Veteran |
15-Jun-2020 15:56
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ok. buy some for accumulation
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Djsoul80
Master |
15-Jun-2020 15:52
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It is a yes from me.
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Hector
Veteran |
15-Jun-2020 15:47
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good time to buy for long term growth? | ||||
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Djsoul80
Master |
15-Jun-2020 14:49
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Bought some for accumulation. Anyone else? After reading so many write ups on the SCI and SCM. I guess after SCM rights issue and SCI distribution of SCM shares, there's a call for shares consolidation. But merger with Kepcorp may not go through at least for this year till mid of next year. Kepcorp will need to settle their lawsuit first.
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Djsoul80
Master |
15-Jun-2020 14:14
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Actually I'm good with the rights issue but not good with the Keppel merger now.. Hope the merger doesn't get through..
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TA_Expert
Supreme |
15-Jun-2020 13:22
Yells: "The World has changed" |
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Veto the resolutions. Making the shareholders of SCI rich at the expense of SMM shareholders is a no no. |
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gravity8888
Supreme |
15-Jun-2020 13:18
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Can start to short...?? Dow Future very red | ||||
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Octavia
Supreme |
14-Jun-2020 12:30
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To Merge Sembcorp Marine And Keppel O& M Is NOT Up To Temasek And Shareholders Alone? Anti-Competition Authorities May REJECT!The recent Sembcorp saga is the much talk about topic in town. I read in blogs, articles and forums and everyone is talking about the merger of Keppel Offshore and Marine (KOM) and Sembcorp Marine (SCM). Perhaps some investors are also tempted to invest because of the merger that can potentially drives up the share price for them to make a profit, disregarding the business fundamentals. In theory, it is natural to think that as long as Temasek becomes a controlling shareholders of both Keppel and SCM, Temasek can decide on the merger. But in reality, it is not only up to Temasek or the shareholders of both companies! 
As an insider within this business for close to two decades in the Asia Pacific region and not just Singapore, there are many other issues that outside investors do not know and understand.
KOM and SCM are two world&rsquo s largest oil rig builders, combining these two giants in the oil and gas sector will mean almost complete monopoly in this segment of business. The Floating Production Unit (FPU) segment is also dominated by KOM and SCM and a Chinese shipyard Cosco.
The global anti-competition authorities will have to give the approval, which they may reject the merger, or the process may just drag on and on. Clients of KOM and SCM who are mostly Oil companies, Rig builders and FPU contractors may also reject to the merger deal!
Do you think the clients of KOM and SCM will applaud the merger so that KOM and SCM can monopolise the business segments and quote higher pricing to them? Most of the clients are in US and EU where they can impose strong Anti-competition laws over the tiny Singapore.
What if the clients and the Anti-competition bodies boycott the merger or threaten not to award any more projects to the Singaporean company?
Do we still think that Temasek is all powerful to say " I don' t care but I just want to merge?"
Of course I am not saying that it is impossible for the merger to proceed, but what I am saying is that it is not as easy or not as short-time as what many investors think here.
This is because we only set our sights on immediate benefits for ourselves, while being ignorant in many other issues that needs to be consider.
Anti-competition objection
In March 2019, Hyundai Heavy Industries (HHI) signed an estimated U$1.7B agreement with the state-run Korea Development Bank to buy its smaller rival Daewoo Shipbuilding & Marine Engineering (DSME). Following the deal, HHI and DSME will have a combined backlog in very large crude carriers (VLCCs) and LNG carriers accounting for more than 60 percent of the world total.
Due to the monopolistic status, the deal will need to get approval from fair trade authorities in European Union (EU), Japan, China, Singapore and Kazakhstan since these countries have shipping companies which are HHI and DSME&rsquo s biggest customers. One year has passed, the merger plan is still under review by the authorities in five countries. So far, only Kazakhstan has approved it.
Earlier in 2018, Japan had already lodged a complaint with the World trade Organization (WTO), claiming that Korean government has provide unfair financial support to Korean shipbuilders. South Korean and Japan held talks on the merger on 30 March 2020 but failed to iron out their differences.
Singapore regulators also said the deal between HHI and DSME threatens to remove competition in the supply of LNG carriers, container ships and oil tankers to Singapore customers. In turn, it will also create high barriers to entry for new players specifically with regards to LNG carriers.
It was reported last month that EU antitrust regulators have suspended their probe into the merger of the two South Korean firms until further notice, waiting for more information to be provided by the companies. Early last year, EU also rejected the transport rail services merger between two giants Siemens and Alstom citing concerns of competition fairness which may lead to higher prices for the passengers. The list of mergers that are rejected over the years due to anti-competition is long if you do your own research.
In view of the extreme difficulty to get approval from fair trade authorities, a possible merger between KOM and SCM, the world&rsquo s two largest rig builders will definitely face the same scrutiny and resistance from anti-trust watchdogs.
Inefficiencies from merger
Due to reduce competition within Singapore. Although there are still shipyards in Singapore such as ST Marine and Kuok&rsquo s group Paxocean, there is really little other competition within the country. If there is any state-owned projects within Singapore government to be awarded, there will be no or reduced competition. Non-competition over a longer term may cause decline in human efficiency.
Furthermore, KOM and SCM are in general competitive only in niche and high-end projects nowadays. A workforce that is too comfortable will become lackluster in innovations and efficiency over time. In no time, competition from China and Vietnam will catch up and eliminate any competitive edge that the Singapore company has.
FINAL THOUGHTS
Please note that I am not a shareholders of both companies and I am not against the merger. In fact, like most of you, I think a merger is positive in this dire industry. Not only is rising cost an issue, the margins are thin or even non-existence in many projects.
Many outsiders thought it is the excess capacity that leads to excessive high cost that resulted in losses. It is not really the truth. In fact, my close dealings with the industry reveal that both companies are experiencing extreme shortage of human capacity not just in workforce manhours, but also in knowledge and experiences. This industry demands years of experiences and technical know-how from staffs. From cost estimation, putting up proposals to wining and delivering the projects on time, and within budgets and specifications.
In recent times, KOM and SCM are struggling with the loss of specialised knowledge leading to inaccuracy in cost estimations and poorer project executions with cost over-runs. One main reason is because years of knowledge had already been wiped out during the last oil crisis, due to retrenchments, retirements or veterans leaving the industry. It is also very difficult to attract younger talents in this industry due to the tougher work conditions with no longer lucrative pay. In addition, young talents also requires guidance of older and more experienced employees which is lacking.
I am sure Temasek or the board of KOM and SCM knew that a merger is not as easy as &ldquo we&rdquo think and even if it is viable, it will take time. That said, it is better and easier for Temasek to recapitalise and re-organise both companies in times of crisis with lower orders now, rather than in a time where business is thriving.
Last but not least, I am not saying that a merger is impossible as &ldquo nothing is impossible nowadays&rdquo . All I want is to share in this article an insider perspective on things that external investors may not know.
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gravity8888
Supreme |
12-Jun-2020 14:32
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Thanks man.. Long way to go | ||||
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skyearth_22
Member |
12-Jun-2020 14:05
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egm late Aug/early Sep. Must passed Reso 1st
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Octavia
Supreme |
12-Jun-2020 14:03
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I am not pitting against anyone or swaying opinion with my post.
I pick up articles which of interest and info related to the counter.
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gravity8888
Supreme |
12-Jun-2020 13:41
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When is the date to subscribe? | ||||
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arctician1982
Senior |
12-Jun-2020 13:23
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the smartinvestor article is quite fluffy, just because outlook is bad they recommend u not to subscribe to rights issue. i will rather they say depending on what the price is trading at before XR, investors can decide if they want subscribe to the rights, if not sell the rights away. Letting yourself get diluted without doing anything is the worst one can do | ||||
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Octavia
Supreme |
12-Jun-2020 13:22
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Should Investors Subscribe to Sembcorp Marine&rsquo s Rights Issue?In one of the most startling pieces of news to hit the oil and gas industry, Sembcorp Industries (SGX: U96), or SCI, has announced a recapitalisation exercise for its subsidiary Sembcorp Marine (SGX: S51), or SMM. The exercise is complex, involving both a rights issue to shore up SMM&rsquo s balance sheet, followed by a demerger after the completion of the rights issue to fully and completely separate SCI from SMM. This move will allow both companies to exist as separate entities and grants them flexibility in managing their respective businesses.  The diagram above provides a quick snapshot of this transaction, and how the ownership of SCI and SMM will alter post-transaction. In a nutshell, Temasek Holdings, being the majority shareholder for SCI, will end up directly owning part of SMM after the rights issue. After this rights issue, SCI will then issue a dividend-in-specie of its entire stake in SMM, thereby divesting itself fully of SMM. Should investors subscribe to the SMM rights shares? The rights issue: salient aspectsFirst off, let&rsquo s have a look at the salient aspects of the rights issue. The rights issue will involve the issuance of five shares for each existing share held, at an issue price of S$0.20 per rights share. Gross proceeds of S$2.1 billion are expected to be raised from this exercise. As part of the issue, S$1.5 billion is made up of a loan from SCI to SMM that will be converted to equity in the books of SMM. The equity conversion means that SMM will not receive the S$1.5 billion from SCI. Instead, the loan owed by SMM to SCI will be extinguished. The balance S$0.6 billion of the S$2.1 billion raised will be pumped in by Temasek Holdings. The rights issue price of S$0.20 represents a very steep discount of 76.5% to SMM&rsquo s last closing price of S$0.85 (before the announcement of the rights). Severely dilutiveIf an investor owns 1,000 existing shares of SMM, he will then be allotted 5,000 rights shares and will have to cough up S$1,000 (5,000 x S$0.20) to subscribe for his full entitlement. He could also choose to sell his rights shares in the stock market as the rights issue is renounceable. Note that the ratio of 5:1 makes the entire exercise highly dilutive for shareholders, as the number of issued shares will jump by six times the original amount. As of 31 December 2019, SMM had around 2.09 billion issued shares. Assuming the rights issue is fully taken up, SMM will end up with around 12.5 billion shares in issue. Notably, the group is loss-making right now. Even if the company registers a profit in future, the earnings per share will be diluted by the flood of new shares issued. Smaller cash injection than anticipatedThe group&rsquo s slides tout an improved financial position after the rights issue. Namely, it was flagged that net tangible asset (NTA) for SMM will double from S$1.9 billion to S$4.0 billion. The difference between the two NTA positions is S$2.1 billion. This S$2.1 billion is made up of the conversion of S$1.5 billion of debt that SMM owes to SCI into share capital in SMM&rsquo s books. Thus, SMM will, in fact, only receive a cash injection of S$600 million from Temasek Holdings. Debt heavyA quick check on SMM&rsquo s balance sheet as of 31 December 2019 shows a cash balance of S$389.3 million against a gross debt of S$4.4 billion, of which S$1.5 billion consists of the subordinated loan from SCI. Assuming the rights issue has been completed, this will only bump up SMM&rsquo s cash position to around S$989.3 million, while the gross debt will fall to S$2.9 billion. SMM will still end up being debt-heavy, with a net debt position of around S$1.9 billion. In a trading and liquidity update released by SMM alongside the rights issue announcement, the group acknowledged that securing new orders remains a &ldquo big challenge&rdquo . Operating cash flow is also expected to be low as business volumes remain weak. Although non-essential capital expenditure can be deferred, SMM is unlikely to be able to generate any free cash flow for quite some time. Oil crisis may drag on SMM has been through two oil crises in the last six years. Its order book has been severely hammered, and the current crisis looks as though it may drag on indefinitely even after the world emerges from the pandemic. The above analysis shows that the rights issue is not going to boost SMM&rsquo s liquidity profile significantly. The demerger does shift the ownership of SMM from SCI to Temasek. Although it can be argued that Temasek has deep pockets and can keep SMM afloat, just like what happened with the recent Singapore Airlines Limited (SGX: C6L) rights issue, it may be a long, hard slog for shareholders of SMM. It might not be a good idea to throw good money after bad. Shareholders may wish to think twice before subscribing to SMM&rsquo s rights issue. |
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FloraFauna
Member |
12-Jun-2020 12:22
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https://thesmartinvestor.com.sg/should-investors-subscribe-to-sembcorp-marines-rights-issue/ | ||||
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arctician1982
Senior |
12-Jun-2020 11:22
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thanks i saw the table, question was how the previous guy who shared this announcement know credit suisse is buying or selling? the table only show shares and price transacted, but it can be buy or sell or unwinding of trades on behalf of client
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