24 Jun 2002

The proposed privatisation of SembCorp Marine Ltd by way of a scheme of arrangement

Introduction

The Board of Directors of SembCorp Marine Ltd (“SCM“) wishes to announce the proposed privatization of SCM by SembCorp Industries Ltd (“SCI“) by way of a scheme of arrangement (“Scheme“) under Section 210 of the Companies Act, Chapter 50 (the “Act“). The Board further wishes to draw the attention of shareholders to the announcement released by SCI today in connection with the Scheme. The said announcement by SCI can be accessed at the official website of the Singapore Exchange Ltd at www.sgx.com.

The Scheme

As of the date of this Announcement, SCM has an issued and paid-up share capital of S$140,931,208 comprising 1,409,312,080 ordinary shares of S$0.10 each (“SCM Shares“). SCI holds 888,803,260 SCM Shares, representing approximately 63.07 per cent of the issued share capital of SCM.

The Scheme will be proposed in accordance with Section 210 of the Companies Act, Chapter 50 (the “Act“) and the Singapore Code on Take-overs and Mergers (as revised with effect from January 1, 2002) (the “Code“).

Under the Scheme:-

1. all the issued SCM Shares (except those SCM Shares held by SCI) (“Scheme Shares“) will be transferred to SCI. As SCI will acquire the remaining SCM Shares under the Scheme, the SCM Shares held by SCI are therefore excluded from the Scheme; and

2.in consideration, SCI will pay S$1.10 (“Scheme Price“) in cash for each SCM Share transferred to it.

As a result of the Scheme, SCI will hold all the issued SCM Shares and SCM will be delisted from the Singapore Exchange Securities Trading Limited (“SGX-ST“).

The Scheme Price represents:

1. a premium of approximately 23 per cent to the last transacted price per SCM Share on the SGX-ST of S$0.895 as of June 21, 2002 (being the last trading day of the SCM Shares on the SGX-ST prior to the date of this Announcement and hereinafter referred to as the “Last Transacted Price“);

2.a premium of approximately 22 per cent to the 1-month average closing price of SCM Shares traded on the SGX-ST prior to this Announcement;

3. a premium of approximately 23 per cent to the 6-month average closing price of SCM Shares traded on the SGX-ST prior to this Announcement; and

4. a premium of approximately 71 per cent to the audited net tangible assets per SCM Share as of December 31, 2001

The Scheme Shares will be acquired (1) fully paid; (2) free from all liens, equities, charges, encumbrances, rights of pre-emption and other third party rights or interests of any nature whatsoever; and (3) together with all rights attached thereto as of the date hereof and hereafter attaching thereto (except that in respect of any dividend (interim or special) that may be declared and paid after the date hereof and before the Scheme becomes fully effective and binding, such dividend shall remain payable to the shareholders of SCM in accordance with the articles of association of SCM and the applicable laws).

For illustration purposes, should the interim gross dividend declared by SCM be the same as last year in the amount of S$0.15 per SCM Share, the Scheme Price would represent a premium of approximately 25 per cent to the Last Transacted Price net of such interim dividend.

Further and for the avoidance of doubt, the final and special dividend as announced on February 18, 2002 (“Announced Dividend“) will remain payable to the shareholders of SCM who are entitled to such Announced Dividend (as per the said announcement) on June 28, 2002.

Conditions of the Scheme

The Scheme will become binding and effective if:-

1. the Scheme is approved by a majority in number of, representing not less than 75 per cent in nominal value of the Scheme Shares held by, the SCM shareholders (other than SCI and parties acting in concert with SCI) (“Scheme Shareholders“), present and voting, either in person or by proxy, at a meeting convened by order of the High Court of Singapore;

2.the Scheme is sanctioned by the High Court of Singapore and an office copy of the order of the High Court of Singapore sanctioning the Scheme is lodged with the Registrar of Companies and Businesses in Singapore; and

3. unless waived by the SGX-ST, the approval of the shareholders of SCI is obtained for SCI to proceed with the Privatisation at an extraordinary general meeting of SCI (“SCI EGM“).

All Scheme Shareholders should take note that by voting in favour of the Scheme, they will be regarded as having waived their rights to a general offer from SCI and/or the parties acting or demand to be acting in concert with SCI under the Code.

The substantial shareholders of SCI, namely, Temasek Holdings (Pte) Ltd and Singapore Technologies (Pte) Ltd, have each given its written confirmation that it will vote in favour of the Privatisation at the SCI EGM (if convened).

Interest of Directors and Substantial Shareholders of SCM

AS SCI intends to privatise SCM and the SCM Shares held by it will not be included in the Scheme, its interests are therefore different from the other shareholders of SCM. Accordingly, SCI will abstain from voting on the Scheme.

Mr Wong Kok Siew, Chairman and director of SCM, is also a director of SCI and holds the position of Deputy Chairman and Chief Executive Officer in SCI.

Mr Tan Pheng Hock, a director of SCM, is also a director of ST Engineering Ltd (“ST Engineering“), a subsidiary of Singapore Technologies (Pte) Ltd which is in turn a substantial shareholder of SCI, and holds the position of President and Chief Executive Officer in ST Engineering.

Save as disclosed above, no other substantial shareholder or Director of SCM has any interest in the Scheme (other than by reason only of being a shareholder or Director of SCM).

Independent Financial Adviser to SCM

SCM will appoint an independent financial adviser (“IFA“) to advise the Independent Directors (as referred to below) of SCM in connection with the Scheme and the substance of such advice will be made known to the shareholders of SCM in the formal document containing the Scheme (“Scheme Document“) which will be dispatched to the shareholders of SCM.

Independent Directors of SCM

The directors of SCM who are considered to be independent for the purposes of the Scheme and capable of making recommendations to the Scheme Shareholders under the Code will make their recommendations in the Scheme Document upon receipt of the advice of the IFA.

SCM Options

The Scheme will be extended to all SCM Shares issued or delivered following the exercise or vesting of any options or awards granted under SCM’s share-based incentive plans (collectively, “SCM Options“) prior to the effective date of the Scheme. In addition, SCI will propose an appropriate arrangement with respect to the outstanding SCM Options to the holders thereof in order to ensure that their interests are not prejudiced by the Scheme. Details of such arrangement will be dispatched to holders of SCM options not later than the date of dispatch of the Scheme Document to SCM’s shareholders. SCI has confirmed that in proposing any such arrangement with respect to the outstanding SCM Options, it will take note of and comply with the requirements of Rule 19 of the Code.

Delisting following the Completion of the Scheme

It is the intention of SCI to make SCM its wholly-owned subsidiary. It is therefore not the intention of SCI to preserve the listing status of SCM. If the Scheme becomes effective and binding, SCI will then proceed to delist SCM from the SGX-ST.

Responsibility Statement

The directors of SCM (including any who may have delegated detailed supervision of this Announcement) have taken all reasonable care to ensure that the facts stated in this Announcement (other than facts relating to SCI) are fair and accurate and that no material facts have been omitted from this Announcement, and they jointly and severally accept responsibility accordingly. Where any information has been extracted from published or publicly available sources, the sole responsibility of the directors of SCM has been to ensure through reasonable enquiries that such information is accurately extracted from such sources or, as the case may be, reflected or reproduced in this Announcement.

Next Steps

SCM will dispatch a Scheme Document to SCM shareholders containing further information on the Scheme, the recommendations of the Independent Directors and the advice of the IFA, and giving notice of the meeting to approve the Scheme in due course.

Shareholders are advised to refrain from taking any action in relation to the SCM Shares which may be prejudicial to their interests until they or their advisers have considered the information set out in the Scheme Document and the recommendations of the Independent Directors and the advice of the IFA.

General Information

Further relevant information on SCM and SCI is set out in the Appendix.

Released on : June 24, 2002

By order of the Board
SembCorp Marine Ltd

Ms Lim Seh Li
Company Secretary

For enquiries, please contact:
Ms Lim Seh Li
Company Secretary
SembCorp Marine Ltd
Tel : (65) 6357 9260
Fax : (65) 6352 2673

Submitted by Lim Seh Li, Company Secretary on 24/06/2002 to the SGX

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