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MON, SEP 14, 2020 - 12:39 PM
SHARES in Sembcorp Marine (SMM) were actively traded on Monday morning as the marine and offshore engineering group saw a selloff in its shares following its recapitalisation exercise.
As at 12.11pm, some 95.9 million SMM shares changed hands, making it the most heavily traded counter on the Singapore bourse for the morning.
The counter tumbled more than 3 per cent at one point, before recovering slightly to 15.9 Singapore cents, down 0.4 per cent or 2.5 per cent from Friday' s close.
SMM' s two-stage corporate exercise involving Sembcorp Industries (SCI) and Temasek Holdings was completed last week.
Under the deal, SMM raised some S$2.1 billion through a five-for-one rights issue of new shares priced at S$0.20 each. The 10.5 billion rights shares were credited last Friday.
SCI and SMM then de-merged, through a distribution in-specie of SCI' s stake in the recapitalised SMM.
The market price of SMM could continue to be weighed down in the weeks ahead, as an avalanche of new shares hit the market.
Meanwhile, last Wednesday, investors piled into shares of SCI on the counter' s first day of trading excluding entitlements, while SMM' s stock inched lower.
SMM has a significantly strengthened balance sheet after its rights issue. On a pro forma basis, its net gearing would have been cut from 1.82 times to 0.45 times. That would enable SMM to better execute its existing projects, compete for more high-value work, and pursue merger and acquisition opportunities.
1. SMM can now go after the new energy projects ....which is a growing industry .
2. Oil is NOT dead.....its just demand n supply issue which personally I dont believe oil will be replace totally . yes air planes n vehicles usage n much reduced but can this be forever ? Oil rig will still b needed ....the question is when ?
3. SCI holders are unloading n adding w some large short volume ...it has depress SMM share prices.....BUT FOR HOW LONG . Once a rebonce ....it can cause a panic buy back ....further at 0.16 n below ...what discount is this to the book ? Dyodd
4. 30/40 c in the next one to two years possible ? haha that is double yr investment IF ( agree it is IF ) ....but not many stock can double
5. large volume over the last few days of unloading ....every sell is a buy ....who is the buyer ??
DYODD ....happy investing.
1. SMM can now go after the new energy projects ....which is a growing industry .
2. Oil is NOT dead.....its just demand n supply issue which personally I dont believe oil will be replace totally . yes air planes n vehicles usage n much reduced but can this be forever ? Oil rig will still b needed ....the question is when ?
3. SCI holders are unloading n adding w some large short volume ...it has depress SMM share prices.....BUT FOR HOW LONG . Once a rebonce ....it can cause a panic buy back ....further at 0.16 n below ...what discount is this to the book ? Dyodd
4. 30/40 c in the next one to two years possible ? haha that is double yr investment IF ( agree it is IF ) ....but not many stock can double
5. large volume over the last few days of unloading ....every sell is a buy ....who is the buyer ??
DYODD ....happy investing.
From : BusinessTimes, 14th Sept 2020
Yet, in the face of the Covid-19 turmoil, Temasek' s moves in its home market have suddenly become very exciting too. While the companies involved are hardly on the cutting edge of technology, Temasek' s efforts to support them, and unlock value, is no less inspiring for investors.
Temaseks' s role in the two-stage corporate exercise involving Sembcorp Marine (SMM) and Sembcorp Industries (SCI) that was completed last week is a case in point.
Under the deal, SMM raised some S$2.1 billion through a 5-for-1 rights issue of new shares priced at S$0.20 each. SCI and SMM then de-merged, through a distribution in-specie of SCI' s stake in the recapitalised SMM.
Only 90.2 per cent of the more than 10.46 billion SMM rights shares were taken up though. This included the maximum 7.5 billion SMM rights shares that SCI had undertaken to buy.
Even though SCI owns 61 per cent of SMM, it had agreed to take up as much as 72 per cent of the rights issue. SCI is paying for these rights shares by offsetting a S$1.5 billion subordinated loan it extended to SMM last year.
The unsubscribed 9.8 per cent of SMM rights issue - totalling nearly 1.03 billion shares - went to Temasek, under a sub-underwriting deal. This would have cost Temasek almost S$205.7 million.
SCI then distributed its enlarged holding of 8.77 billion shares in the recapitalised SMM to its shareholders, on the basis of 4.911 SMM shares per SCI share.
SCI and SMM closed Friday at S$1.18 and S$0.163 respectively.
SCI versus SMM
The whole corporate exercise has been hard on shareholders of SMM. Besides having to fund a big rights issue, their rights shares are now trading underwater.
On the other hand, shareholders of SCI - including Temasek - have done quite well. Just before the deal was announced, SCI traded at S$1.53. But holders of each SCI share now also have 4.911 shares in SMM. The current total value of their SCI and SMM shares would be S$1.98.
From Temasek' s perspective, before the deal was announced, its 49.3 per cent stake in SCI had a market value of nearly S$1.35 billion.
After spending nearly S$205.7 million backstopping SMM' s rights issue, and receiving its entitlement of SMM shares from SCI' s distribution in-specie, the investment company would now also be holding some 5.35 billion SMM shares, or about 42.6 per cent of the whole company.
The current market value of Temasek' s stake in SMM is about S$872.7 million, while its stake in SCI is worth almost S$1.04 billion. This adds up to about S$1.91 billion.
The big question is where shares in SCI and SMM go from here.
For now, the consensus seems to be that the re-rating of SCI has been entirely justified. Without SMM weighing it down, SCI will be more profitable and have a stronger balance sheet.
According to pro forma estimates, SCI' s earnings per share would increase by 22 per cent, its return on equity would rise by 4.4 percentage points to 7.9 per cent, and its total borrowings would decline by S$2.9 billion to S$8.7 billion (including perpetuals).
On the other hand, the market price of SMM could continue to be weighed down in the weeks ahead, as an avalanche of new shares hit the market. SMM also faces a tepid business outlook in the immediate term.
Yet, SMM has a significantly strengthened balance sheet after its rights issue. On a pro forma basis, its net gearing would have been cut from 1.82 times to 0.45 times. That would enable SMM to better execute its existing projects, compete for more high-value work, and pursue merger and acquisition opportunities.
SMM is now trading at just 53 per cent of its book value.
If we look at company fundamental with vast experiences and projects on hand moving forward, I think it is a good buy at current cheap price range for mid to long term view
Once vaccines are out and oil price return back to good range, we can possibly see a big jump. This will be a good bet
Once vaccines are out and oil price return back to good range, we can possibly see a big jump. This will be a good bet
I always believe there will be a MIGHTY push for such stock when Bb had collected enough and when those selling abates.
It may happen anytime from now.
It may happen anytime from now.
the close on 3 June if i remember correctly was due to a rush in buying..just before the rights issue..
in fact it was a big push of the share price when there were no catalyst for it..
imo, it might not be worth that much in the first place..
do note that the rights issue has diluted many ratios by 5x..in fact one can only imagine how low the eps would be..when it starts to be profitable again someday..
in fact it was a big push of the share price when there were no catalyst for it..
imo, it might not be worth that much in the first place..
do note that the rights issue has diluted many ratios by 5x..in fact one can only imagine how low the eps would be..when it starts to be profitable again someday..
danger ( Date: 14-Sep-2020 10:42) Posted:
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crazy to short now too low price already... want to short should short at 80cents or 24.5 XR
gravity8888 ( Date: 14-Sep-2020 11:08) Posted:
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Anyone shorting..
buying at near 15c will be another 50% discount to TERP
yes ...
5 for 1 at S$0.20 per share
5 for 1 at S$0.20 per share
- 31.0% discount to TERP1 based on 5-day2 VWAP3 of S$0.744
- 35.1% discount to TERP based on last close of S$0.85
- 76.5% discount to last close of S$0.85 on 3 June 2020
Bry_2004 ( Date: 14-Sep-2020 10:37) Posted:
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is the terp worth 30cts in the first place..
waiting 15c
danger ( Date: 13-Sep-2020 10:51) Posted:
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lets say everyday 100 million sahres people sell .. it takes at east 1 month to clear all their holdings ( 3 billion ) to buyers waiting at cheap price
SCM: buy and then don watch till 1 month later
SCI: buy and then don watch till 1 year later
The above is my time horizon
SCI: buy and then don watch till 1 year later
The above is my time horizon
it did not dive. however the volume for scm is tremendous high.
the trading is super intense.
the trading is super intense.
lailai ( Date: 14-Sep-2020 10:04) Posted:
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now everyone waiting to buy temasek and bro icxgold shares cheaper
Currently look horrible, diving below 16.
Someone' s tp of 15 on the way akan datang liao.
Someone' s tp of 15 on the way akan datang liao.
danger ( Date: 14-Sep-2020 10:00) Posted:
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bro ICXGOLD bankrupt
he sold SCI at low and bought SCM quite high though lower than 20c
he sold SCI at low and bought SCM quite high though lower than 20c
ICXGOLD ( Date: 11-Sep-2020 13:47) Posted:
| Just sold 4000 lots of SCI to enter into SCM @ 0.17. Tamasek scooped up 1 billion shares at 0.20 in the rights and are sitting on a loss of 30 million :) so pretty sure they would do what it takes to get it back to atleast 0.20. So I can book a 15% gain and switch back to SCI. This move also lets me average down my SCM shares to 18.35 centa for SCM which is below its rights price |
Boatman ( Date: 14-Sep-2020 09:57) Posted:
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who is icx gold?
I think will double the price soon
I think will double the price soon