Sembcorp Marine Rights Issue
Sembcorp Industries and Sembcorp Marine jointly announced on 8 June 2020 a proposed transaction involving the recapitalisation of Sembcorp Marine through a S$2.1 billion renounceable rights issue (the “Rights Issue”), followed by a proposed demerger of the two companies via a distribution in specie (the “Proposed Distribution”) of Sembcorp Industries’ stake in the recapitalised Sembcorp Marine to Sembcorp Industries shareholders.
The boards and management teams of Sembcorp Industries and Sembcorp Marine believe that the proposed Rights Issue and the Proposed Distribution (collectively, the “Transaction”) will strengthen the two companies’ financial positions and will unlock shareholder value, and is in the best interests of our respective shareholders.
Key Highlights of the Proposed Transaction
1. S$2.1 billion renounceable Rights Issue
2. Proposed Distribution of Sembcorp Marine shares to Sembcorp Industries shareholders
1 TERP – Theoretical ex rights price
2 Based on the 5-day period up to and including the last close as of 3 June 2020
3 VWAP – Volume weighted average price
4 73.0% discount to the 5-day VWAP, based on the 5-day period up to and including the last close as of 3 June 2020
5 Held by Temasek and its wholly-owned subsidiaries
The Transaction will enable Sembcorp Industries and Sembcorp Marine to better focus on their respective industries. With greater flexibility following the demerger, both companies can pursue their own sustainable growth paths on the back of changes to their industries in recent years.
Upon completion of the proposed Transaction, both Sembcorp Industries and Sembcorp Marine will have strong shareholder bases to support the respective companies’ strategies and business models for the long term.
Sembcorp Industries will continue to be focused on its core areas of energy and urban development, and be poised to capture opportunities in sustainable energy transition, while Sembcorp Marine builds on its core engineering solutions for the offshore, marine and energy industries.
Sembcorp Marine, which has been doubly hit by the COVID-19 pandemic and recent collapse in oil prices, will also be able to better address its urgent need to recapitalise, meet liquidity requirements, and strengthen its balance sheet to ride through the prolonged downturn in the offshore and marine industry.
Summary of Benefits to Shareholders
In summary, Sembcorp Marine shareholders will benefit from the Rights Issue in the following ways:
Sembcorp Marine will strengthen its liquidity position and balance sheet, enabling it to execute its existing projects and compete for high-value projects going forward.
The demerger with Sembcorp Industries will enable the Company to pursue a focused strategy and build further its core engineering and execution capabilities.
Sembcorp Marine will have a strong long-term future as a global leader in innovative engineering solutions for the offshore, marine and energy industries, with an increasing focus on clean energy.
Following Sembcorp Industries’ Proposed Distribution, Sembcorp Marine will have Temasek as a direct and significant shareholder.
Next Steps: Shareholders’ Approval at Extraordinary General Meetings
Sembcorp Industries and Sembcorp Marine will be seeking their respective shareholders’ approval for the Transaction at Extraordinary General Meetings (“EGMs”) to be convened on 11 August 2020 via electronic means.
The Rights Issue is also conditional on Sembcorp Marine shareholders passing a resolution to waive their rights to receive a general offer from Temasek and its concert parties in connection with the Proposed Distribution.
Sembcorp Industries has given an undertaking to vote in favour of the Rights Issue resolution at Sembcorp Marine’s EGM. The Proposed Distribution and the Rights Issue are inter-conditional, and will only proceed if shareholder approvals are received for all resolutions at both companies’ EGMs.
More information on Sembcorp Marine’s EGM, including steps for pre-registration, pre-submission of questions and voting, can be found at the extraordinary general meeting section of our website .
- SIAS Dialogue Sessions for SCM on 28 July and SCI on 29 July – Key Shareholder Questions Addressed (30 July 2020)
- Additional Information in Response to Questions from SIAS (22 July 2020)
Proposed Rights Issue, Transaction Rationale and Related Updates
- Notice of EGM (22 July 2020)
- Proxy Form for EGM (22 July 2020)
- Circular to Shareholders (22 July 2020)
- Circular Presentation (22 July 2020)
- SGX Announcement on EGM (22 July 2020)
- Receipt of Approval-in-Principle from SGX (22 July 2020)
- Sembcorp Marine SGX Launch Announcement & Appendices (8 June 2020)
- Launch Announcement (8 June 2020)
- Investor Presentation on Rights Issue (8 June 2020)
- Trading & Liquidity Update (8 June 2020)