Seatrium Limited (formerly SembCorp Marine and KOM)

(28-09-2015, 04:18 PM)greengiraffe Wrote:

(28-09-2015, 11:27 AM)cfa Wrote: Got sold down again , future still milky ?

The worst is yet to come... otherwise u think parent company sold the Aussie associate for what...

If im not wrong, they sold that aussie business at more than 3x the book value. 
If somebody were to offer u to buy over your sembcorp ind shares at 9.5$, would u sell? The answer is just too obvious... the market is pricing the share at nav, somebody else is seeing 3x more.

(28-09-2015, 06:53 PM)boochap Wrote:

(28-09-2015, 04:18 PM)greengiraffe Wrote:

(28-09-2015, 11:27 AM)cfa Wrote: Got sold down again , future still milky ?

The worst is yet to come... otherwise u think parent company sold the Aussie associate for what...

If im not wrong, they sold that aussie business at more than 3x the book value. 
If somebody were to offer u to buy over your sembcorp ind shares at 9.5$, would u sell? The answer is just too obvious... the market is pricing the share at nav, somebody else is seeing 3x more.

of course there is a price to everything... anyway, if someones pays more than 3x BV surely there is something that they see as strategic... how do one explain why capland parted ALZ for a song and noone is questioning their willingness to let something go after building it for more than a decade...

No faith in GLCs
GG

No business no matter how much costs u cut, u can only pray for the tide to turn... reinventing is a BS by top level people...  http://www.straitstimes.com/business/com...to-survive

The Straits Times
Marine sector 'must reinvent to survive', Companies & Markets News & Top Stories - The Straits Times
Companies & Markets News -The offshore and marine industry has to reinvent itself in order to ride out the downturn, said Economic Development Board (EDB) chairman Beh Swan Gin yesterday.. Read more at straitstimes.com.

With the perfect storm, SCM's balance sheet is severely strained with EJA completion and TuasView Phase2 carried forward. Mgt started stressing that they have enough lending facilities to tide over short term loans when they come due. What about the longer term ones?

If Parent sells some businesses and child is in distress, is it time for child to have a cash call soon?

http://infopub.sgx.com/Apps?A=COW_CorpAn...ntract.pdf

Lai liao... the storm has started... the mess has just started... who is right or wrong?

MP Drilling has today issued PPL, the builder of the New Rig, a notice of termination of the Rig Construction Contract following the latter's failure to comply with certain of its material contractual obligations. In arriving at this decision to terminate the Rig Construction Contract, MP Drilling has taken into account various factors including cracks found on all three legs of the New Rig during two rounds of tests, notwithstanding repair works carried out by PPL after the first round of tests.

In view of the termination of the Rig Construction Contract, MP Drilling will not be taking delivery of the New Rig and it will be seeking, among others, a refund from PPL of the initial amount of 10% of the contract price (approximately US$21.4 million) previously made to PPL pursuant to the Rig Construction Contract together with interest.

- Marco Polo ordered the rig in Feb 2014, to be delivered in Dec2015 with 2 more options. The order was 207% of its market capitalization and it had no ready available customer or expertise/partner to go into the offshore drilling market with.
- It claimed that it would be funding the 217mil USD rig with a combination of 'internal resources and borrowings'. Up to 3Q15, it only had ~15mil worth of cash, a 71mil market cap, ~184mil short/long term loans and no 'partners' in sight to 'share' the burden. I expect that the rig did not have a charter at that time.
- MP was supposed to pay another 10% of the contract not later than 11th Feb 2015 (to make up 20% down payment). I assume it wised up and didn't pay up (or ask for a delay) after oil prices started to tank in 2H14.

In happier times:
Mr Sean Lee Yun Feng, Group CEO, remarked that:
“The signing of the agreement with PPL Shipyard is an epochal moment as it marks the start of a significant leap forward in terms of our operations and service offerings. Together with the grant of the two option units, we are delighted to work together with PPL Shipyard as it is one of the most highly regarded shipyards globally. We are confident of the on-time and quality delivery of high specification rigs from PPL Shipyard backed by its strong track record. The Group’s entry into this business segment coupled with the expected delivery of the Rig in fourth quarter of 2015 is timely in view of the favourable demand-supply dynamics. Against a backdrop of stable oil prices, demand for jack-up rigs is growing as governments encourage offshore oil and gas exploration and production with enhanced
urgencies in the region. Currently, almost half of the existing global fleet is more than 30 years old by our reckoning. This means that these older generation rigs, inhibited by age and obsolescence, would require significant renewals which would bolster demand for newer generation high-specification rigs in the foreseeable future.

http://infopub.sgx.com/FileOpen/Media_Re...eID=283450
http://infopub.sgx.com/FileOpen/Marco_Po...eID=283440

As Warren Buffett used to say 'What the wise men does in the beginning. The fool does in the end'.

(18-11-2015, 12:11 AM)weijian Wrote: - Marco Polo ordered the rig in Feb 2014, to be delivered in Dec2015 with 2 more options. The order was 207% of its market capitalization and it had no ready available customer or expertise/partner to go into the offshore drilling market with.
- It claimed that it would be funding the 217mil USD rig with a combination of 'internal resources and borrowings'. Up to 3Q15, it only had ~15mil worth of cash, a 71mil market cap, ~184mil short/long term loans and no 'partners' in sight to 'share' the burden. I expect that the rig did not have a charter at that time.
- MP was supposed to pay another 10% of the contract not later than 11th Feb 2015 (to make up 20% down payment). I assume it wised up and didn't pay up (or ask for a delay) after oil prices started to tank in 2H14.

In happier times:
Mr Sean Lee Yun Feng, Group CEO, remarked that:
“The signing of the agreement with PPL Shipyard is an epochal moment as it marks the start of a significant leap forward in terms of our operations and service offerings. Together with the grant of the two option units, we are delighted to work together with PPL Shipyard as it is one of the most highly regarded shipyards globally. We are confident of the on-time and quality delivery of high specification rigs from PPL Shipyard backed by its strong track record. The Group’s entry into this business segment coupled with the expected delivery of the Rig in fourth quarter of 2015 is timely in view of the favourable demand-supply dynamics. Against a backdrop of stable oil prices, demand for jack-up rigs is growing as governments encourage offshore oil and gas exploration and production with enhanced
urgencies in the region. Currently, almost half of the existing global fleet is more than 30 years old by our reckoning. This means that these older generation rigs, inhibited by age and obsolescence, would require significant renewals which would bolster demand for newer generation high-specification rigs in the foreseeable future.

http://infopub.sgx.com/FileOpen/Media_Re...eID=283450
http://infopub.sgx.com/FileOpen/Marco_Po...eID=283440

As Warren Buffett used to say 'What the wise men does in the beginning. The fool does in the end'.

http://www.valuebuddies.com/thread-3095-...#pid122601

Offshore sector was a big one in regional exchanges due to largely the fortunes of the majors such as KepCorp and Sembmarine. They are no different from the mining services providers Down Under.

They have little proprietory knowledge so to speak and is largely dependent on the big cycle.

O&G has been on the up since early Y2K. Whatever supply imbalances and renewal would have been history. Renewals is a bull mkt efficiency stories. In a long winter like this since there is no COE on equipments, the lack of demand on the part of clients due to global costs cut-backs will likely result in massive over-supply.

The newer equipments whilst efficient will likely have depressed usage rates and hence rental income. The older ones that require more maintenance are likely to be laid up while waiting for eventual scrapping or being reused at substantially lower fixed costs recovery rates shld cycle start to turn.

So far, global commodities are still trying to find some form of bottoming and hence the best cycle recovery plays will be the fittest upstream players...

That is my old school logical analysis. Hence local O&G plays can be forgotten till we see more blood - bankruptcies and M&A for bailout purposes.

GG

Nov 18, 2015 - Sembcorp Marine falls 2.2% after dispute with Marco Polo Marine

http://www.theedgemarkets.com/sg/article...olo-marine

So the "failure to meet contractual obligations" and allegations of defects could just be a ruse to terminate an unfavorable deal by Marco Polo? Well, time to sit around and watch the fireworks fly.

Find fault to cancel order when market turns bad .
Rather surprised SMM took this order from a very small and unproven player .
But if SMM has a case to fight , Marco Polo may not have the financial muscle to face the legal suit .