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Sembcorp Marine overvalued

Maybe the fat general from SPH will rotate to CEO of SMM and then sell to foreigner.

chart_expert123      ( Date: 19-Aug-2020 17:19) Posted: The money raised from right will pay back the debt recently loan from Temasek. It will be back to the same issue, when will sembmar turn profitable? Compared to keppel, sembmar didn't lay off employees and shut down subsidiaries like keppel since oil price crashing in 2015. So, the cash burnt and debt roll up for last 5 years and resulted today right issue. Sembmar are far from recovery and it may be a temasek endless bleeding cow like previous chartered semicon or NOL.

 

The money raised from right will pay back the debt recently loan from Temasek.

It will be back to the same issue, when will sembmar turn profitable?

Compared to keppel, sembmar didn't lay off employees and shut down subsidiaries like keppel since oil price crashing in 2015. So, the cash burnt and debt roll up for last 5 years and resulted today right issue.

Sembmar are far from recovery and it may be a temasek endless bleeding cow like previous chartered semicon or NOL.

 

WHAT YOU MUST DO WITH YOUR SEMB CORP MARINE RIGHTS

Sembcorp Marine rights will be trading on SGX today (19 Aug 2020).

There are at least 3 options you can consider. Regardless which you choose,  you  MUST ACT.

Please don&rsquo t repeat the SIA renounceable rights and MCBs  episode  previously.

If you need more information, you can  refer to this  where we explained what Sembcorp Marine and Sembcorp Industries wanted to do. Here&rsquo re the  relevant documents  from Sembcorp Marine about the offer.

To make it easier for you, these are your possible options:

Option 1: Sell

These are renounceable rights which means they will be traded on SGX.  You can choose to sell them  instead of paying to convert them to shares.

My guess is that the initial price would be close to $0.02 since Sembcorp Marine closed at $0.22 and the conversion price is $0.20 for each right. But of course the prices are subjected to changes due to market forces and perceptions.

How many rights will you have?

You get 5 rights for every share you own.  Simply multiply the Number of Share you own by 5 to get the number of rights you have.

You can also login to your CDP account or refer to your broker&rsquo s letter (if you held the shares in a custodian account) to confirm the number.

Who should consider selling?

You should sell if you have NO intention to subscribe the rights.

At least you get back some cash. Don&rsquo t let it expire.

You have until 27 August 2020 at 5.00 pm to sell them and after which the counter will be delisted. The counter is Sembcorp Marine R (SGX:THFR).

Option 2: Subscribe

You can also  subscribe by paying $0.20 to convert each right to a share  in Sembcorp Marine.

If you have 1,000 shares, you would be granted 5,000 rights. You can pay $1,000 to convert the rights to shares and you will end up with a total of 6,000 shares.

If you wish to subscribe, make sure you do so within the time period!

You can  pay for the conversion  at the ATMs (shares held in CDP) or transfer to your broker (shares held in custodian).

The acceptance of the payments and applications starts from 19 Aug 2020, 9am and  ends on 2 Sep 2020, 5pm.

Option 3: Subscribe to partial rights and sell remainder

The last option is that you can  subscribe to fewer rights than you were entitled.

For e.g., you have 5,000 rights but only wish to subscribe to 2,000 rights. You can pay for the 2,000 rights ($400), and SELL the remaining 3,000 rights that you want to give up.

You&rsquo ll need to take 2 actions:

1. SELL the rights which you don&rsquo t wish to convert and,
2. PAY for the partial rights you want to convert within the stipulated dates.

I recommend you to do both at the same time in case you forget to do one and not the other.

Option 4: Subscribe to MORE rights

You can also  subscribe to more rights  than what you were given.

To do so, you can either:

• BALLOT for excess rights by paying for more rights during the application, or
• BUY more Sembcorp Marine R (SGX:THFR) from the stock market.

The advantage of the former is that you don&rsquo t need to pay additional fees (above the $0.20 conversion) for the excess rights. But it is a ballot so it isn&rsquo t guaranteed you get what you applied for.

The advantage of buying the rights from the stock market is that you would definitely get the excess rights and can convert them to shares. The downside is that you have to pay extra in this process.

Important: Please Act

The worst thing you can do in this exercise is to do nothing.

You should either sell the rights or pay for them to convert to shares.

Last Warning:  The rights will stop trading on 27 Aug 2020, 5pm and the last date to pay for conversion would be 2 Sep 2020, 5pm.

Decide now and act!

 

Lol... actually my advice when the scheme comes out is to sell immediate. Before XR

Anything, if really want to buy SMM, wait under whole sage over. And this incldes crediting of SMM shares to SCI shareholders. Expect another round of selling

dimebag      ( Date: 19-Aug-2020 12:58) Posted: Is anyone subscribing to the rights or just going to sell at literally no value?

 

wanted to sell the rights hopefully at 1c or 2c.

at this price not even worth the effort

 

Is anyone subscribing to the rights or just going to sell at literally no value?

 

To my knowledge, SMM has no scripts for shorting..

 

Very true.These are the sophisticated traders who have the knowledge,means and leverage not many retailers can have the opportunity to do this.Basically they are the PRO.

sapneela      ( Date: 19-Aug-2020 11:50) Posted: I think a lot of activity in the market revolves around a strategy where one short the mother share ( after borrowing it ) and then buys right at very cheap price ( like $0.002 or 0.001). If they shorted mother share at $0.25 or even at $0.22 and today they can buy the rights at $ 0.002, their buyinng price will be $0.202 ( 0.020+0.002). They can still make money by the arbritage but in the process , the guys who wanted to sell their rights ( as they dont want to fork out additional money to subscribe to rights)  see the value of their rights dropping to close to zero. Unfair game.  More selling will happen when all subcribers of rights start selling from 2nd September onwards.

 

Fund ofc belongs to different league.I referring to retailers, minority shareholders who are s always at the losing end.

destinykraze      ( Date: 19-Aug-2020 11:49) Posted: Funds have access of super low rates. when you talk about volume like 100m rights. They will still make a lot of $. The selling pressure will continue. Octavia      ( Date: 19-Aug-2020 11:02) Posted: Rights so low price sell also lose money taking into consideration of broker fees.Majority of minority shareholders ended up doing nothing,i.e. remain status quote and hope for the best.

 

I think a lot of activity in the market revolves around a strategy where one short the mother share ( after borrowing it ) and then buys right at very cheap price ( like $0.002 or 0.001). If they shorted mother share at $0.25 or even at $0.22 and today they can buy the rights at $ 0.002, their buyinng price will be $0.202 ( 0.020+0.002). They can still make money by the arbritage but in the process , the guys who wanted to sell their rights ( as they dont want to fork out additional money to subscribe to rights)  see the value of their rights dropping to close to zero. Unfair game.  More selling will happen when all subcribers of rights start selling from 2nd September onwards. 

 

Funds have access of super low rates. when you talk about volume like 100m rights. They will still make a lot of $.
The selling pressure will continue.

Octavia      ( Date: 19-Aug-2020 11:02) Posted: Rights so low price sell also lose money taking into consideration of broker fees.Majority of minority shareholders ended up doing nothing,i.e. remain status quote and hope for the best.

 

Majority minor shareholders won't attend EGM and vote. Not vote against, it will automatically counted as vote agreed.

In short term, there will not plan to merge keppel and sembmar after this right issue.

Plan may triggered by Temasek again after covid19 once aviation industry is recovered.

schreck      ( Date: 19-Aug-2020 10:59) Posted: amazing can still 97% vote for the restructure

 

This is common for company which issue major right, price stay below 20 cents after ex right due to panic selling.

Buy up strength not found, bottom price are not yet determined.

 

< $0.20 coming?

 

Rights so low price sell also lose money taking into consideration of broker fees.Majority of minority shareholders ended up doing nothing,i.e. remain status quote and hope for the best.

 

The real selling will only begin when the big hands is at near the end of their distribution.

 

amazing can still 97% vote for the restructure

 

Ya... it will be like SIA MCB. Towards end of trading period, Selling at $0.001 but no takers

 

No incentive to subscript the right issue shares, I think the mother share will drop below $0.20 is only a matter of time.

destinykraze      ( Date: 19-Aug-2020 10:47) Posted: Tons of people unloading since subscription price is at $0.20 per share.

 

Shareholders' shares are diluted, earnings per share will drop dramatically. Sembcorp marine will settle at $0.2 for quite a while.