Sembcorp Marine wishes to thank Shareholders for demonstrating their support for the Company by participating in the Rights Issue, at the EGM and through the subscription process, and enabling the successful completion of the Rights Issue.

Background

Sembcorp Industries and Sembcorp Marine jointly announced on 8 June 2020 a transaction involving the recapitalisation of Sembcorp Marine through a S$2.1 billion renounceable rights issue (the “Rights Issue”), followed by a demerger of the two companies via a distribution in specie (the “SCI 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 Rights Issue and the 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.

Results of the Rights Issue

Sembcorp Marine (the “Company“) announced on 7 September 2020 that, as at the close of the Rights Issue on 2 September 2020, valid acceptances and excess applications were received for 9,434,192,612 Rights Shares, representing approximately 90.2% of the 10,462,690,870 Rights Shares available under the Rights Issue.

This included 7,500,000,000 Rights Shares, representing approximately 72% of the 10,462,690,870 Rights Shares available under the Rights Issue, comprising the SCI Pro Rata Rights Shares and SCI Excess Rights Shares for which SCI had subscribed in accordance with the SCI Undertaking Agreement.

Details of the valid acceptances and excess applications received for Rights Shares are as follows:

Pursuant to the Sub-Underwriting Agreement, Startree, a wholly-owned subsidiary of Temasek, has subscribed for the balance of 1,028,498,258 unsubscribed Rights Shares.

For more details on the results of the Rights Issue, please refer to our 7 September 2020 announcement at this link.  

Issue and Listing of Rights Shares

The 10,462,690,870 Rights Shares were allotted and issued on the Main Board of the SGX-ST on 11 September 2020 pursuant to the Rights Issue. 

Based on the foregoing, the net proceeds raised by the Company from the Rights Issue are approximately S$2.1 billion. Of the net proceeds, an amount of S$1.5 billion (representing the consideration for 7,500,000,000 Rights Shares subscribed for by SCI pursuant to the SCI Undertaking Agreement) has been allocated and will be utilised to repay (by way of set off) the outstanding principal of S$1.5 billion under the Subordinated Credit Facility in accordance with the stated use and the percentage allocated as disclosed in the Offer Information Statement. Following the foregoing utilisation, the amount of unutilised net proceeds would be approximately S$0.6 billion.

The Rights Shares will, upon allotment and issue, rank pari passu in all respects with the then existing Shares, except that they will not rank for any dividends, rights, allotments or other distributions the record date for which falls before the date of allotment and issue of the Rights Shares.

Following the allotment and issue of the 10,462,690,870 Rights Shares, the number of issued Shares (including 416,840 treasury shares) increased from 2,092,955,014 Shares to 12,555,645,884 Shares.

Please refer to our 10 September 2020 announcement at this link for the full details.

Trading of Rights Shares

Trading of the Rights Shares commenced with effect from 9.00 a.m. on 11 September 2020. For information, please refer to our 10 September 2020 announcement at this link. 

Settlement of the SCI Distribution

The allotment and issue of the Rights Shares took place before 9.00 a.m. on 11 September 2020, the same day as the settlement date of the SCI Distribution and the date of crediting of the Shares to the Securities Accounts of SCI Shareholders pursuant to the SCI Distribution .

On completion of the SCI Distribution, Sembcorp Marine has ceased to be a subsidiary of SCI. Following the Transaction, Temasek’s wholly owned subsidiary Startree Investments is now a direct and significant shareholder of the Company. 

Please refer to our 15 September 2020 announcements on the changes in interests relating to Temasek and its subsidiaries as well as SCI. 

Transaction Overview and Rationale

Footnotes:
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

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.

Following completion of the 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:

1.  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.

2. The demerger with Sembcorp Industries will enable the Company to pursue a focused strategy and build further its core engineering and execution capabilities.

3. 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.

4. Following Sembcorp Industries’ Distribution, Sembcorp Marine has Temasek as a direct and significant shareholder.

Related Links

Rights Issue, Transaction Rationale and Related Updates

• Changes in Interest of Substantial Shareholder (15 September 2020) – Sembcorp Industries Ltd
• Changes in Interest of Substantial Shareholders (15 September 2020) – Temasek Holdings (Private) Limited / Fullerton Management Pte. Ltd. / Startree Investments Pte. Ltd. 
• Issue and Listing of Rights Shares and Settlement of SCI Distribution (10 September 2020)
• Results of the Rights Issue (7 September 2020)
• Offer Information Statement (14 August 2020)
• Renounceable Underwritten Rights Issue: (1) Lodgment of Offer Information Statement (2) Acceptance and Excess Application for Rights Shares (3) Trading of Nil-Paid Rights (Under Stock Code: THFR); and (4) Timetable of Key Events (14 August 2020)
• Results of the Extraordinary General Meeting Held by Sembcorp Industries (11 August 2020)
• Results of the Extraordinary General Meeting Held by Way of Electronic Means (11 August 2020)
• Conditional Record Date for the Rights Issue (5 August 2020) 
• Possible Delay in Receipt of Printed Copies of Circular (29 July 2020)
• 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) 

Q&As

• Additional Information in Response to Questions from Shareholders (10 August 2020)
• Additional Information in Response to Questions from Shareholders (6 August 2020)
• 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)