SembCorp Marine

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Rainbow 
SembMarine@12


https://links.sgx.com/FileOpen/KCL%20Ann...eID=711898
Termination of Contracts
Keppel Offshore & Marine Limited,
has issued notices of termination for the Relevant Contracts on 13 April 2022. The basis for termination is the failure of the respective clients without reasonable or legal justification to take delivery of the respective rigs (despite Keppel FELS’ readiness to deliver) and concurrently pay the outstanding installments.



Stay safe and stay healthy, everyone
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Rainbow 
SembMarine@0.13

Very last minute, the ppt for proposed merger of SembCorp Marine with Keppel O&M:
https://links.sgx.com/FileOpen/Joint%20P...eID=714196

[Image: KOM_SCM-Comb.jpg]
credit: https://www.marinelog.com/news/keppel-om...er-agreed/




I was wondering how Sembcorp Marine is going to pay the $0.5b? is another rights coming? and if it is, what would be the price of the rights?

Stay safe and stay healthy, everyone.
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KOM already "Paid that $500m cash" to KepCorp  before the "merger" into Combined Entity

"the Op Co that is travelling to the Combined Entity  ....  is after excluding the out-of-scope assets, the legacy rigs going to Asset Co and after the S$500 million in cash has been paid to Keppel"
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Rainbow 
Thanks Vseeker for clarifying - indeed, the $500m already paid to Keppel.  The question remains - is SembCorp Marine going to rise right for the purchase of Keppel O&M?
Angel

Wishing everyone a happy Labour Day.
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Activist top shareholder taking action, hope to see more minority shareholders connecting and helping each other in our retail investment scene.

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Sembmarine shareholder campaigns against merger with Keppel O&M
https://www.businesstimes.com.sg/compani...-keppel-om
" A MINORITY shareholder of Sembcorp Marine : S51 -0.83% (Sembmarine) – who identifies himself as Philip Loh – is urging other shareholders to vote against the company’s proposed merger with the offshore and marine arm of Keppel Corp.

Claiming to be among the 20 largest shareholders of Sembmarine, Loh has started what appears to be a website (http://www.votenoformerger.com/) to campaign against the “highly disadvantageous” deal......."

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AR2021 : https://www.sembmarine.com/scm2016/wp-co...AR2021.pdf
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The shareholders does have valid points such as Keppel Corp (KC) using the whole orderbook figures of its subsidiary contract win to boost KOM's figures vis-a-vis SCM. Its quite surprising that KOM is able to hive off the 5 rigs ordered from Borr- Tivar, Vale, Var, Huldra, Hedirun, which has been fully built and kept in cold store since 2021. This means the cash proceeds (approx $500 million) upon delivery in 2025 will be channeled to Keppel Corp instead of SCM.

To me, the whole corporate structuring has been unfairly tilted to Keppel Corp's favour where KOM is taking a larger pie and despite being in a worse shape (with negative equity). In fact, it does not have much orders, outside the Hyundai's venture. It does show what the "invisible boss" behind the scenes is saying... KC to hive off its unprofitable assets become a property/teleco company and SCM becomes like a bad debt bank collecting all the struggling O&M units.

While rigs utilizations rate has grown to 80%, it is still below 1Q2020's level, no new orders has been won by SCM for 5 months for shallow water rigs. It tells how bad the state of rig building is. My view still stands where SCM should not even acquire KOM's assets when it is going to be idle come 2024. KOM should just liquidate itself since it has demonstrated the ability to hive off the Borr legacy assets, keep in a separate entity and tell KC to write off a few million to billion in yard asset sales. Of course, this does not look good to KC as there are not many rig builders available to buy off its assets.

(not a SCM investor since July 2021 as from the series of corporate events I viewed SCM as an "unfavored child for OPMI" in the Temasek family)
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(11-06-2022, 09:13 AM)CY09 Wrote: (not a SCM investor since July 2021 as from the series of corporate events I viewed SCM as an "unfavored child for OPMI" in the Temasek family)

I do agree that Temasek has not been friendly to OPMI in recent years, and used to be quite gentleman.

"Keppel O&M will pay S$500 million in cash to Keppel as part of its “pre-combination restructuring” for the partial redemption of certain perpetual securities. Keppel O&M has entered into a commitment letter with DBS Bank for a loan of up to S$500 million to effect this cash payment.

This issue is a sore point with shareholders of Sembmarine, because the company had announced a rights issue last year to raise S$1.5 billion at the same time that it announced plans to merge with Keppel O&M.

This rights issue came only months after an earlier rights issue that raised S$2.1 billion in 2020.

Although Sembmarine’s gearing as at end-March 2021 stood at 0.74 times, this did not mean the company was under financial duress as its projects were simply delayed, Loh said.

The shareholder argued that Sembmarine’s second rights issue seemed “inconsistent”, and led to huge losses and dilution for minority shareholders." - Business Times

(08-07-2021, 07:37 PM)specuvestor Wrote: it is particularly annoying for those who had subscribed rights at 20cts not so long ago.

I'm sure there are many who would like to know the logic of 8cts; why not 16cts and reduce the rights by 1/2 but instead provide the reason for Mr Market to penailse existing OPMI stake to go down to 12cts. Or Temasek can do another MCB at 18-20cts strike Big Grin

I don't think Temasek has a problem of keeping SMM listed even if GO. Just have to get waiver to place out shares so that 10% freefloat. Might be a consideration for others but incredible why it would be Temasek's reason.

(Bloomberg) -- Temasek has undertaken to subscribe for up to 67% of the 2021 Sembcorp Marine rights issue, the investment firm says in a statement.
Temasek says Sembcorp Marine will have certainty it will raise full S$1.5b it requires
Temasek has undertaken to subscribe to its pro-rata entitlements, as well as excess rights not taken up by other shareholders, which total up to 67% of the rights issue in aggregate
Says DBS has separately underwritten the remaining 33% of rights issue
Temasek views this rights issue to be in best interests of Sembcorp Marine
Reiterates that the upcoming rights issue and potential Sembcorp Marine combination with Keppel O&M are independent transactions, which will be separately and independently subject to shareholder votes
Says it is improper to suggest that these are part of a corporate exercise to benefit Temasek at the expense of minority shareholders of SembMarine

(24-06-2021, 07:23 PM)specuvestor Wrote: Agree and bad taste after just issuing rights at 20cts. I think M&A guy in Temasek might have been changed and not the usual gentleman Temasek anymore, after a distasteful Capitaland grab in my view.
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward

Think Asset-Business-Structure (ABS)
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Interestingly, in the sharejunction/SembMarine thread, there is a post stating that there will be a "face-to-face" closed door meeting tmr with Mr Loh and the mgmt/SIAS. Shareholders can reach out to join (http://www.votenoformerger.com/) but capacity is severely limited. Given the sound investing knowledge of some buddies here, I think some vested cld be interested ?

According to the AR2021 and matching just the first & surname, Mr Loh's shareholdings is 0.16% which has not crossed the level of substantial shareholder by definition. I recall it's not possible to even meet with BW's mgmt even though we have a group representing many shareholders(granted BW's case is not a corporate action vote). Then what about those other takeover offers which are deemed lowball by shareholders ? Generally, how do we, minority shareholders, help ourselves ? It seems at the very least, a "unifying force"(a fellow shareholder stepping out and rallying the rest) helps although it may not always work and what if there is none ?
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Its like a normal election. Rally a sufficient number of shareholders to vote the opposition. However, in the context of Singapore's corporate, the affairs of a company is not widely followed, publicized as news and participation in voting is not compulsory and are apathetic.

SGX did try to help where if the minorities in attendance are significant despite them holding less than 50% of shares on a whole, the resolution can be voted down. However, this is not easy because the corporate company firstly has a large number of votes and somehow they have the majority in numbers in participation. Shareholder activism is a relatively muted affair here and for many of the large Temasek's corporates, the resolutions they propose will prevail. Hence writing grievances is a paper exercise as the writing is already on the wall.

For SCM case, I started to see how unfriendly they were and sensed that I will be diluted and not given a fair value perceived. I did write to SIAS as well but was just referred me to SCM investor relations who did respond and stated their stand. In the end, I just gave up as I was not bothered to fight against an insurmountable obstacle.
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(22-06-2022, 05:25 PM)Re proposed merger of SCM/KOMKOM to me is a more efficient/profitable entity compared with SCM. Therefore it's important to know who in KOM are willing/crossing over to the new combined entity to give it the best chance of success. If the key KOM personnel is running the merged entity, I think we should let the merger proceed.CY09 Wrote: Its like a normal election. Rally a sufficient number of shareholders to vote the opposition. However, in the context of Singapore's corporate, the affairs of a company is not widely followed, publicized as news and participation in voting is not compulsory and are apathetic. 

SGX did try to help where if the minorities in attendance are significant despite them holding less than 50% of shares on a whole, the resolution can be voted down. However, this is not easy because the corporate company firstly has a large number of votes and somehow they have the majority in numbers in participation. Shareholder activism is a relatively muted affair here and for many of the large Temasek's corporates, the resolutions they propose will prevail. Hence writing grievances is a paper exercise as the writing is already on the wall.

For SCM case, I started to see how unfriendly they were and sensed that I will be diluted and not given a fair value perceived. I did write to SIAS as well but was just referred me to SCM investor relations who did respond and stated their stand. In the end, I just gave up as I was not bothered to fight against an insurmountable obstacle.
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