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My personal point of view If everything go thru then SMM could be a SCI dumping ground😬
action to dump soon
Using its rights entitlement to set off against its $1.5b, SCI does not mean it will get any cent back-it is just a write off. It lumbered the worries to its shareholders who must have a deep long faith in SMM thence. Shareholders of SMM is very fortunate unlike the PERPs of Hyflux.
why are there so huge delta between RHB and UOB KH TP? is it one pre-Ex Rights and the other Post Ex Rights?
61 will be gone soon
becarful
Uob target 0.250
http://research.sginvestors.io/2020/06/sembcorp-industries-sembcorp-marine-uob-kay-hian-research-2020-06-09.html?m=1
http://research.sginvestors.io/2020/06/sembcorp-industries-sembcorp-marine-uob-kay-hian-research-2020-06-09.html?m=1
Sembcorp is right to cast off its marine unit both entities will be the better for it
IT has taken a pandemic to push industrial conglomerate Sembcorp Industries (SCI) into doing what was long overdue.
On Monday, the conglomerate unveiled a proposal that could see the firm fund the bulk of Sembcorp Marine' s (SMM) S$2.1 billion recapitalisation exercise and then completely wean off the loss-making marine unit.
Travis Lundy, an analyst at Quiddity Advisors who publishes on SmartKarma, called the proposal a " very carefully-constructed technical move" by SCI to avoid increasing its short-term credit exposure to SMM.
Under the deal, SCI will not cough up any cash to take up SMM' s massive rights issue. Instead, it plans to set off the S$1.5 billion subordinated loan it had extended to the rig builder a year ago to fund its rights entitlement and some.
SMM will use S$1.5 billion of its rights issue proceeds to repay the outstanding principal on the loan to its parent SCI by converting the loan into equity on its balance sheet.
SCI will also spin off its stake in the recapitalised SMM to its shareholders, including its largest owner Temasek Holdings, via a distribution in specie.
Temasek is also backstopping S$600 million of SMM' s rights issue.
The real competition
" Sembcorp Marine is being cast away... by its parent," remarked Mr Lundy.
That' s not necessarily a tragic outcome as SMM is being " cast" to Temasek - a shareholder with a lot more clout and capital.
The investment firm could end up owning between 29.9 and 58 per cent of SMM depending on the rights' take-up rate.
Temasek' s potential entry into SMM is fuelling hopes that the much-talked-about mega merger between SMM and Keppel Offshore & Marine may finally happen.
After all, how many giant rig builders does Singapore need when the real competition is in China?
The deal will also leave SMM, which is hurting from a dearth of new jobs in a pandemic-led oil slump, with less debt and more cash for working capital as it charts a separate course from SCI for the first time in over two decades.
" We view the sharply lower gearing (as) a big positive, as this will help SMM better engage potential customers and also better meet banks' loan covenants," pointed out RHB Research.
SCI shareholders, meanwhile, can rest easy now that a privatisation of SMM by SCI - an idea that has long been bandied about - is out of the picture.
This is not 2002, when SCI had launched a privatisation of SMM by way of a scheme of arrangement but was rebuffed by shareholders.
Then, SMM was stronger financially - with a net cash position - and the outlook for rig builders was rosy.
Today, uncertainties abound. When, for instance, will the oil market turbulence end?
When will SMM, which has been in the red since 2018, start making money again?
In contrast, the proposed deal' s value proposition for SCI is abundantly clear. SCI' s stunning gain of 37 per cent to S$2.09 on Tuesday post-announcement is an indication of how positively the market views the deal.
SCI is poised to be liberated from the shackles of its cyclical marine business and transformed into a defensive utilities and urbanisation play.
Big boon
The conglomerate' s years-long pivot to power generation, water, renewables and green energy solutions plus sustainable urban developments may finally get the investor attention it deserves.
That would be a big boon for a stock that has suffered a major beating since it got the boot from the MSCI Singapore Index last month.
When all is said and done, the key question is: Will both firms be better off post-recapitalisation and de-merger versus the status quo?
The answer is a resounding yes.
https://www.businesstimes.com.sg/companies-markets/sembcorp-is-right-to-cast-off-its-marine-unit-both-entities-will-be-the-better-for
shortist in action
reliever ( Date: 10-Jun-2020 10:31) Posted:
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Heavily in debt and hardly any business for the coming years.
It could be a P&D jobs! Maybe today we can see $0.50++
westpoison ( Date: 10-Jun-2020 09:58) Posted:
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should be $ 1.2 at least?
1 + 5 right shares @ $0.20?
1 + 5 right shares @ $0.20?
littleones ( Date: 10-Jun-2020 10:10) Posted:
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SMM should be $1 at least
westpoison ( Date: 10-Jun-2020 09:58) Posted:
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Why the price still so high? It should be 20c right?
Buyers at 62 keep piling up, BB buying?
as SMM shareholder think we quite lucky liao, got SCI and Temasek as direct or indirect parent to support working capital, otherwise will have a similar story like hyflux. hopefully with the 20c rights the keppel consolidation and premium will allow all of us to exit at profit
Shorting??
short srhot
Most of the SMM holders are eagerly waiting for a chance to escape at a higher price.
uncle2020 ( Date: 10-Jun-2020 09:18) Posted:
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last nite wan bao analysts say target 1.13, recom buy in....
hope so, is gd news...
hope so, is gd news...
danger ( Date: 10-Jun-2020 09:08) Posted:
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