SembCorp Marine

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SIAS has questioned SembCorp Marine on its recent corporate action.

To me, not much can be done and Sembcorp Marine will likely go ahead with it. The sign of them throwing in the kitchen sink of losses this FY is probably a way to ensure less than 20% of the total rights issue will continue to be taken up by minority shareholders.
SembCorp Marine@12

I guess most people missed the main point.

Don't mind, I repeat what Ben Paul reported: 
this right issue is critical as SembMarine operations have been severly impacted.

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and, as if not enough, SembCorp publish a profit guidance, just in case anyone still have any doubt whether this 2nd round of rights is it really necessary.  Rolleyes
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Basically, the project backlog is serious.
SembCorp Marine is going into overdrive mode just to clear these backlog which will definitely cost it an arm and a leg.

Does it have a choice not to complete these backlog?
Does it have a choice to terminate these contracts?

It might have, but will it?
Who will want to do a loss making business?

Shouldn't it negotiate with its customers to increase the project/contract cost?
Why not?

And, I tell you my thought on the worst case scenario (which you could see from Keppel case).  When the project was rushed to completion, see what will the customer says, in term of taking delivery.

My thought is no decent customer will says thank you and accept the goods.

Let's see.

Oh, those were for the existing project/contract.

Obviously, moving forward, the more project/contract win for SembCorp Marine, the more worry one need to be concerned about it's profitability.

As Min Lawrence highlighted in Parliament recently:
There are no short of new projects....
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Winning a contract is one thing, delivering the project profitably is another.

So, for a million dollar, why would a company kept winning a loss-making contracts?
Big Grin

Stay home and stay safe, everyone.
Does that mean there might be another Rights issue to fund the potential combination with KepCorp if it goes thru?
1. It's clear that non of the $$$ raised thru the 2nd rights could be use for the merger.  It's also clear that all the $$$ raised in 2nd rights is for the survival of SembCorp Marine.

2. Once we are clear, then the next question would be who will fund for the merger.  For example, if Keppel is taking over SembCorp Marine, then Keppel would have to foot the bill.  And of course, if SembCorp Marine is going to swallow Keppel, then you had asked a valid question aka whether another rights will be issued.

What we are clear is SembCorp Marine is key to Singapore Sustainability projects, so it's survival is guaranteed.

Stay home and stay safe, everyone.
Hopefully they keep these solar farms restricted to reservoirs which do not serve as parks. Parkgoers probably do not find it pleasant looking out into a sea of solar panels. And because very little energy is generated from these panels, it would seem foolish to me if these panels were installed in crowded reservoirs like Macritchie.

Because of the lack of physical space, there is actually very little that Singapore can do to green its energy source. Which is why the nuclear idea was floated (off the coast of Singapore, of course) some time ago. Maybe we will see geothermal plants in the future. I see the solar farm in Tengeh as more of a signal of Singapore's climate change effort, rather than being the main effort itself.

There has been a lot of green talk over the past few years, and developed Western nations have moved away from coal in a significant manner, albeit more modestly when the less dirty fossil fuels are also considered.

In an ideal world, all transportation/appliances are powered by electricity, and all electricity is generated by renewable sources. But there are many reasons why the world is still far from relying on wind and solar to accomplish this. Nuclear is dangerous. Of the renewable sources, geothermal probably has the most potential to make big waves in meeting baseload needs.

Nevertheless, more investment dollars going into the development of numerous energy sources means more competition to produce the greenest, cheapest, and safest energy. That is a good thing. And for nations large and small, having more sources is also a strategy for achieving energy security. While the momentum of the 'greening movement' has been tremendous, I think fossil fuels will not become relegated as a fuel source in my lifetime.
SembCorp Marine @ 11

Basically, it's critical to raise rights and there are no lender for $1.5b cash in such a short time.

If the right is successful, then $1.5b cash is plan to burn down until end 2022. The reason why end 2022 is because by that time, the project should be ending and $$$ start to come back.

If right is unsuccessful, then ....

There is another episode of merger with Keppel.
Valuebuddies recalled that in the first rights issues, $2.1b was raised and $1.5b was given to SembCorp Industry.
So, in the next episode, Keppel will get only $0.5b cash.  Tongue

That's the reason why everyone keep asking whether this $1.5b cash raise in this round right issues will be given to Keppel.  Big Grin

Any way, for minor shareholders who apply for excess rights, you could be certain that you will definitely get them because 
guess what, you are given higher priority to get the excess rights.
Congratulation!  Cool

Last but not least, if there is a mandatory general offer, the offer price will be $0.08 cents and yes, SembCorp Marine would still be listed as per plan.

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Stay home and stay safe, everyone.
SembCorp Marine@10

I speculate that with or without the 2nd rights, SembCorp Marine and Keppel O&M merger will definitely go thru.

There are a lot of people (supporter for the merger) claiming the reasons and benefits for a single/dominant O&M company in Singapore.  So, status-quo would not be acceptable.

Instead of letting SemCorp Marine collapse, it would seems to be easier to merge into Keppel O&M, right?

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Furthermore, with the merger, Keppel would get $0.5b cash.  Big Grin

Stay home and stay safe, everyone.
SembMarine 1H2020 result
Net loss $647m
Net current liability $694m
Of the S$0.6 billion of net cash raised, S$0.43 billion has been used for working capital purposes, including S$0.13 billion in July 2021.

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Stay home and stay safe, everyone.

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