Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Week in Event SPACE:  Afterpay, SPH, ESR Cayman, Prosus/Naspers, Kingsoft, Milton, SOHO China

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<a href="https://www.smartkarma.com/entities/singapore-press-holdings-limited" target="_blank" data-smartkarma-citation="entities:9952:1" rel="noopener">Singapore Press Holdings (SPH SP)</a>/SPH announced a privatisation offer from <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a>. Keppel is taking private SPH through via a scheme of arrangement. The transaction involves Keppel offering S$0.668 cash per SPH share and 0.596 Keppel REIT units per SPH share along with SPH distributing-in-specie 0.782 SPH REIT units per SPH share. Based on the last close price of <a href="https://www.smartkarma.com/entities/keppel-reit" target="_blank" data-smartkarma-citation="entities:192:1" rel="noopener">Keppel REIT (KREIT SP)</a> and <a href="https://www.smartkarma.com/entities/sph-reit" target="_blank" data-smartkarma-citation="entities:5994:1" rel="noopener">SPH REIT (SPHREIT SP)</a>, the total consideration is S$2.099 per SPH share, which is a 39.9% premium to the share price of S$1.50 on 30 March 2021 (announcement of SPH’s strategic review) and an 11.6% premium to the share price of S$1.88 on 30 July 2021 (last trading day). The privatisation proposal is the culmination of the SPH’s strategic review to unlock shareholder value. Keppel's offer was the best offer from several proposals evaluated, according to SPH management. The strategic review commenced with the announcement of the media business restructuring announced on 6 May. Post completion of the media business restructuring (requires approval at the EGM in Aug-Sep), SPH would be released from NPPA restrictions including the 5% shareholding cap restriction. Due to the impending lifting of the 5% shareholding cap, the SPH Board's preference was an offer for the whole SPH, to ensure the emergence of a controlling shareholder.<div class="content-highlight">The key conditions for the successful privatisation are the completion of the media business restructuring, regulatory approval, SPH and Keppel shareholder approval. The modest premium/discount to historical long-term multiples and share prices is unlikely to excite long-term SPH shareholders. The offer price is largely designed to appeal to SPH shareholders lacking patience for SPH to unlock value through capital recycling (such as a listing of PBSA assets, disposal of investments), a post-COVID-19 recovery particularly in its property businesses and improving earnings quality through diversifying into defensive assets. Overall, while the implied offer price is not a knockout bid, it is ok in the context of our SoTP valuation (post-media business restructuring). </div>

Singapore Press Holdings (SPH SP)/SPH announced a privatisation offer from Keppel Corp (KEP SP). Keppel is taking private SPH through via a scheme of arrangement. The transaction involves Keppel offering S$0.668 cash per SPH share and 0.596 Keppel REIT units per SPH share along with SPH distributing-in-specie 0.782 SPH REIT units per SPH share. Based on the last close price of Keppel REIT (KREIT SP) and SPH REIT (SPHREIT SP), the total consideration is S$2.099 per SPH share, which is a 39.9% premium to the share price of S$1.50 on 30 March 2021 (announcement of SPH’s strategic review) and an 11.6% premium to the share price of S$1.88 on 30 July 2021 (last trading day). The privatisation proposal is the culmination of the SPH’s strategic review to unlock shareholder value. Keppel's offer was the best offer from several proposals evaluated, according to SPH management. The strategic review commenced with the announcement of the media business restructuring announced on 6 May. Post completion of the media business restructuring (requires approval at the EGM in Aug-Sep), SPH would be released from NPPA restrictions including the 5% shareholding cap restriction. Due to the impending lifting of the 5% shareholding cap, the SPH Board's preference was an offer for the whole SPH, to ensure the emergence of a controlling shareholder.The key conditions for the successful privatisation are the completion of the media business restructuring, regulatory approval, SPH and Keppel shareholder approval. The modest premium/discount to historical long-term multiples and share prices is unlikely to excite long-term SPH shareholders. The offer price is largely designed to appeal to SPH shareholders lacking patience for SPH to unlock value through capital recycling (such as a listing of PBSA assets, disposal of investments), a post-COVID-19 recovery particularly in its property businesses and improving earnings quality through diversifying into defensive assets. Overall, while the implied offer price is not a knockout bid, it is ok in the context of our SoTP valuation (post-media business restructuring). 

Travis Lundy

Just under three months ago, <a href="https://www.smartkarma.com/entities/singapore-press-holdings-limited" target="_blank" data-smartkarma-citation="entities:9952:1" rel="noopener">Singapore Press Holdings (SPH SP)</a> which is a mini-conglomerate of major Singaporean media interests, an investment fund, and a diverse collection of development and leasing assets in the real estate business, announced that it would restructure, hiving off the media assets into a SPINCO, granting it a pile of cash and assets designed to allow it to work through its problems to stand on its own, then it would be REMAINCO for the real estate and investment assets. This was discussed in <a href="https://www.smartkarma.com/insights/singapore-press-own-time-own-target-restructuring-lor-come-i-clap-for-you" target="_blank" data-smartkarma-citation="insights:51141" rel="noopener">Singapore Press Own Time Own Target Restructuring Lor... (Come I Clap For You)</a>. The shares dropped on the announcement because SPH was giving away cash to the media business. It was costing them money to throw it away. At the time, I suggested that the pre-announcement price of S$1.79/share was reasonably full when looking at the future SPH REMAINCO at something like 0.84x Adjusted Post-Deal P/NAV. Since then, as real estate in Singapore has rallied, SPH shares have rallied from the low S$1.50s where they fell to Friday's S$1.88/share.<h3>The NEW News</h3>This morning we get news that after a period of further review, SPH has decided to accept (<a href="https://links.sgx.com/FileOpen/Proposed%20Privatisation%20of%20SPH%20by%20Keppel%20-%20Joint%20Announcement.ashx?App=Announcement&amp;FileID=676909" target="_blank" rel="noopener">announcement</a>, <a href="https://links.sgx.com/FileOpen/Proposed%20Privatisation%20of%20SPH%20by%20Keppel%20-%20Media%20Release.ashx?App=Announcement&amp;FileID=676910" target="_blank" rel="noopener">press release</a>, <a href="https://links.sgx.com/FileOpen/Proposed%20Privatisation%20of%20SPH%20by%20Keppel%20-%20Presentation.ashx?App=Announcement&amp;FileID=676911" target="_blank" rel="noopener">presentation</a>) being taken over by <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a> based on a Scheme which will deliver to SPH holders S$0.668 in cash, 0.596 units of Keppel REIT, and 0.782 units of SPH REIT through a distribution of 45.4% of SPH's stake in the REIT.Based on the closing prices of 30 July 2021, that would be S$2.099/share or an 11.6% premium to the close. Any dividend that SPH would declare for the fiscal year ending 31 August 2021 would be additive (consensus estimates currently imply ~S$0.02-0.03/share (details in the footnote at the bottom of <a href="https://links.sgx.com/FileOpen/Proposed%20Privatisation%20of%20SPH%20by%20Keppel%20-%20Joint%20Announcement.ashx?App=Announcement&amp;FileID=676909" target="_blank" rel="noopener">p3</a>).There are a fair number of conditions. Approval of the Media Business Restructuring at the SPH EGM later this month or September is a sine qua non - if that doesn't pass SPH shareholders, the thing is off. Then there is another EGM at end-Oct early Nov to approve the resulting deal.  The CEO of Keppel made a presentation on the deal, and his speech is <a href="https://links.sgx.com/FileOpen/GCAT_Speech%20by%20CEO%20Keppel%20Corporation%20on%20proposed%20acquisition%20of%20SPH%20ex-Media.ashx?App=Announcement&amp;FileID=676925" target="_blank" rel="noopener">here</a>. He clearly says the SPH assets are a good deal for Keppel and go some ways to helping Keppel aim at its Vision 2030 goals through enhancing the value of the SPH assets. I note, however, that SPH shareholders get to sell their shares at below book to receive assets that Keppel is liquidating (and mentioning it as a good thing). <div class="content-highlight">SPH holders may be start to ask themselves "Hey Keppel, why you bo jio me?!"</div>There are more complications besides so they are discussed below.

Just under three months ago, Singapore Press Holdings (SPH SP) which is a mini-conglomerate of major Singaporean media interests, an investment fund, and a diverse collection of development and leasing assets in the real estate business, announced that it would restructure, hiving off the media assets into a SPINCO, granting it a pile of cash and assets designed to allow it to work through its problems to stand on its own, then it would be REMAINCO for the real estate and investment assets. This was discussed in Singapore Press Own Time Own Target Restructuring Lor... (Come I Clap For You). The shares dropped on the announcement because SPH was giving away cash to the media business. It was costing them money to throw it away. At the time, I suggested that the pre-announcement price of S$1.79/share was reasonably full when looking at the future SPH REMAINCO at something like 0.84x Adjusted Post-Deal P/NAV. Since then, as real estate in Singapore has rallied, SPH shares have rallied from the low S$1.50s where they fell to Friday's S$1.88/share.The NEW NewsThis morning we get news that after a period of further review, SPH has decided to accept (announcement, press release, presentation) being taken over by Keppel Corp (KEP SP) based on a Scheme which will deliver to SPH holders S$0.668 in cash, 0.596 units of Keppel REIT, and 0.782 units of SPH REIT through a distribution of 45.4% of SPH's stake in the REIT.Based on the closing prices of 30 July 2021, that would be S$2.099/share or an 11.6% premium to the close. Any dividend that SPH would declare for the fiscal year ending 31 August 2021 would be additive (consensus estimates currently imply ~S$0.02-0.03/share (details in the footnote at the bottom of p3).There are a fair number of conditions. Approval of the Media Business Restructuring at the SPH EGM later this month or September is a sine qua non - if that doesn't pass SPH shareholders, the thing is off. Then there is another EGM at end-Oct early Nov to approve the resulting deal.  The CEO of Keppel made a presentation on the deal, and his speech is here. He clearly says the SPH assets are a good deal for Keppel and go some ways to helping Keppel aim at its Vision 2030 goals through enhancing the value of the SPH assets. I note, however, that SPH shareholders get to sell their shares at below book to receive assets that Keppel is liquidating (and mentioning it as a good thing). SPH holders may be start to ask themselves "Hey Keppel, why you bo jio me?!"There are more complications besides so they are discussed below. 

Alamak! SPH Restructuring Restructured as Keppel Bo Jios SPH Holders

Equity Bottom-Up

Fifty four weeks ago, <a href="https://www.smartkarma.com/entities/sembcorp-industries-ltd" target="_blank" data-smartkarma-citation="entities:1087:1" rel="noopener">Sembcorp Industries (SCI SP)</a> and <a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp Marine (SMM SP)</a> announced a gloriously messy recapitalization plan for sembcorp marine, and a de-merger between the two, discussed in <a href="https://www.smartkarma.com/insights/sembcorp-marine-and-sci-a-gloriously-messy-recap-and-de-merger-big-win-for-sci" target="_blank" data-smartkarma-citation="insights:40153" rel="noopener">SembCorp Marine and SCI - A Gloriously Messy Recap and De-Merger - Big Win for SCI</a>. sembcorp marine conducted a large rights offering to raise money to repay a subordinated loan that its then-parent had provided. Temasek backstopped the rights offering. Then SCI spun off SMM to its shareholders.This was, in effect, a transfer of indirect ownership of SMM by Temasek to direct ownership to Temasek.  SMM had been cast away, discussed in <a href="https://www.smartkarma.com/insights/sembcorp-marine-rights-offer-cast-away" target="_blank" data-smartkarma-citation="insights:40164" rel="noopener">Sembcorp Marine Rights Offer - Cast Away</a>. At the time, I said the only good trade was SCI. It has more than doubled since. SMM would have been a great short at the time, but there was almost no stock borrow. It fell, it has bounced back to close to its rights offering price of S$0.20/share. At the time, <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a> was itself undergoing a possible partial tender offer by Temasek - also discussed heavily on Smartkarma <a href="https://www.smartkarma.com/entities/keppel-corp-ltd/insights" target="_blank" rel="noopener">here</a>. That deal ended up failing two months later because of a MAC on NAV triggered by a writedown. That writedown which lowered the NAV was in the rig/O&amp;M space. At the time, of last year's SMM rights offering, I wrote:<blockquote>The relatively common refrain on the Street (and indeed in my insights on the <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp Ltd (KEP SP)</a> Partial Tender Offer) has been the thought that at some point, Temasek would need to sort out the two O&amp;M businesses because Singapore probably doesn't need two unhealthy majors under Temasek influence. An eventual merger between SCM and Keppel O&amp;M has clearly been in people's thoughts. </blockquote><h2>The NEW News</h2>Pre-open on the 24th of June, <a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp Marine (SMM SP)</a> and <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a> were halted pending release of an announcement, which the news had later in the day as being a possible  merger between SMM and Keppel's O&amp;M business. Last night, sembcorp marine announced the <a href="https://links.sgx.com/FileOpen/Launch%20Announcement.ashx?App=Announcement&amp;FileID=672228" target="_blank" rel="noopener">launch</a> with a 20-page <a href="https://links.sgx.com/FileOpen/Presentation.ashx?App=Announcement&amp;FileID=672230" target="_blank" rel="noopener">presentation</a> extolling the virtues and necessity of the rights issue. This was accompanied by a <a href="https://links.sgx.com/FileOpen/Trading%20and%20Liquidity%20Update.ashx?App=Announcement&amp;FileID=672231" target="_blank" rel="noopener">Trading &amp; Liquidity Update</a> which discussed order delays, and difficulty in sourcing workers during the covid mitigation efforts in Singapore. The section on Liquidity and Cash Management tells it like it is.<blockquote>
The delays in construction progress and project completion have resulted in lower operating cash inflows. The deferred payment arrangements under the Transocean Amendment Agreements have also resulted in reduced cash collections in the near term. Conversely, project payables have increased due to the increased labour and other related costs to complete projects.
...
The Group will have to identify potential sources of capital to support and strengthen its liquidity and financial position.
</blockquote>sembcorp marine and Keppel Corp also <a href="https://www.sembmarine.com/stock-exchange-announcements/keppel-corporation-and-sembcorp-marine-commence-talks-on-potential-combination-of-keppel-om-and-sembcorp-marine-to-create-stronger-player-and-accelerate-pivot-to-the-energy-transition" target="_blank" rel="noopener">announced</a> they were to "Commence Talks on Potential Combination of Keppel O&amp;M and Sembcorp Marine, to Create Stronger Player and Accelerate Pivot to the Energy Transition."The "energy transition" concept has been prominent in the commentary from management from both companies. fossil fuel exploration drove the growth of SMM and Keppel O&amp;M. Now that is being replaced by cleaner energy sources both for green reasons and that it is cheaper. That means the support businesses differ. Keppel has installed large floating PV farms as part of its generation infrastructure business, and has looked at more offshore wind farms and the changing needs of OSVs for such renewable energy businesses. It clearly makes sense to pivot. However, that brief explanation of an MOU between the two companies to negotiate exclusively is DEFINITELY worth a read - mostly because of the non-business aspects.  The whole situation deserves some attention, but the trades are obvious.SMM is struggling. It needs cash. It will dilute existing holders via a 3:2 rights offering at S$0.08/share which will lead NTA to S$0.154 and TERP at S$0.1244. The offering is fully backstopped - two thirds by Temasek and one third by DBS - but I expect this to trade to TERP and lower. Borrow will be an issue.More below the fold.

Fifty four weeks ago, Sembcorp Industries (SCI SP) and Sembcorp Marine (SMM SP) announced a gloriously messy recapitalization plan for sembcorp marine, and a de-merger between the two, discussed in SembCorp Marine and SCI - A Gloriously Messy Recap and De-Merger - Big Win for SCI. sembcorp marine conducted a large rights offering to raise money to repay a subordinated loan that its then-parent had provided. Temasek backstopped the rights offering. Then SCI spun off SMM to its shareholders.This was, in effect, a transfer of indirect ownership of SMM by Temasek to direct ownership to Temasek.  SMM had been cast away, discussed in Sembcorp Marine Rights Offer - Cast Away. At the time, I said the only good trade was SCI. It has more than doubled since. SMM would have been a great short at the time, but there was almost no stock borrow. It fell, it has bounced back to close to its rights offering price of S$0.20/share. At the time, Keppel Corp (KEP SP) was itself undergoing a possible partial tender offer by Temasek - also discussed heavily on Smartkarma here. That deal ended up failing two months later because of a MAC on NAV triggered by a writedown. That writedown which lowered the NAV was in the rig/O&amp;M space. At the time, of last year's SMM rights offering, I wrote:The relatively common refrain on the Street (and indeed in my insights on the Keppel Corp Ltd (KEP SP) Partial Tender Offer) has been the thought that at some point, Temasek would need to sort out the two O&amp;M businesses because Singapore probably doesn't need two unhealthy majors under Temasek influence. An eventual merger between SCM and Keppel O&amp;M has clearly been in people's thoughts. The NEW NewsPre-open on the 24th of June, Sembcorp Marine (SMM SP) and Keppel Corp (KEP SP) were halted pending release of an announcement, which the news had later in the day as being a possible  merger between SMM and Keppel's O&amp;M business. Last night, sembcorp marine announced the launch with a 20-page presentation extolling the virtues and necessity of the rights issue. This was accompanied by a Trading &amp; Liquidity Update which discussed order delays, and difficulty in sourcing workers during the covid mitigation efforts in Singapore. The section on Liquidity and Cash Management tells it like it is.
The delays in construction progress and project completion have resulted in lower operating cash inflows. The deferred payment arrangements under the Transocean Amendment Agreements have also resulted in reduced cash collections in the near term. Conversely, project payables have increased due to the increased labour and other related costs to complete projects.
...
The Group will have to identify potential sources of capital to support and strengthen its liquidity and financial position.
sembcorp marine and Keppel Corp also announced they were to "Commence Talks on Potential Combination of Keppel O&amp;M and Sembcorp Marine, to Create Stronger Player and Accelerate Pivot to the Energy Transition."The "energy transition" concept has been prominent in the commentary from management from both companies. fossil fuel exploration drove the growth of SMM and Keppel O&amp;M. Now that is being replaced by cleaner energy sources both for green reasons and that it is cheaper. That means the support businesses differ. Keppel has installed large floating PV farms as part of its generation infrastructure business, and has looked at more offshore wind farms and the changing needs of OSVs for such renewable energy businesses. It clearly makes sense to pivot. However, that brief explanation of an MOU between the two companies to negotiate exclusively is DEFINITELY worth a read - mostly because of the non-business aspects.  The whole situation deserves some attention, but the trades are obvious.SMM is struggling. It needs cash. It will dilute existing holders via a 3:2 rights offering at S$0.08/share which will lead NTA to S$0.154 and TERP at S$0.1244. The offering is fully backstopped - two thirds by Temasek and one third by DBS - but I expect this to trade to TERP and lower. Borrow will be an issue.More below the fold. 

Sembcorp Marine Bites the Bullet - Big Rights Offering - And May Combine with Keppel O&M

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Less that a year after a massive rights issue, <a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp Marine (SMM SP)</a> has announced a big rights issue to strengthen its financial position and accelerate its pivot towards renewable and clean energy.The recapitalisation will be done via a 3:2 renounceable rights issue at a price of S$0.08/share, representing a 58.12% discount to the last close and a 35.69% discount to the Theoretical Ex-Rights Price (TERP).Temasek (via Startree Investments) has committed to subscribe to its 42.6% entitlement and will underwrite part of the excess rights so that its total subscription will not exceed 67% of the rights issue. <a href="https://www.smartkarma.com/entities/dbs-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:22:1" rel="noopener">DBS (DBS SP)</a> is underwriting the remaining 33% of the rights issue.<a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp Marine (SMM SP)</a> and <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a> have also commenced talks on a potential combination of Keppel O&amp;M and SMM to create a stronger player and to accelerate the pivot to energy transition.We expect <a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp Marine (SMM SP)</a> shares to open lower and possibly trade lower in the near-term. The stock trades at high valuations and shareholders looking at the longer term price charts have a right to be wary.<h3>Links</h3><table class="table table-striped"><tbody>
<tr>
<td style="width: 50%;">Detail</td>
<td style="width: 50%;">Link</td>
</tr>
<tr>
<td style="width: 50%;">SMM SP Press Release</td>
<td style="width: 50%;"><a href="https://links.sgx.com/FileOpen/Press%20Release.ashx?App=Announcement&amp;FileID=672241" target="_blank" rel="noopener">Link</a></td>
</tr>
<tr>
<td style="width: 50%;">SMM SP Announcement</td>
<td style="width: 50%;"><a href="https://links.sgx.com/FileOpen/Launch%20Announcement.ashx?App=Announcement&amp;FileID=672228" target="_blank" rel="noopener">Link</a></td>
</tr>
<tr>
<td style="width: 50%;">SMM SP Media Release</td>
<td style="width: 50%;"><a href="https://links.sgx.com/FileOpen/Media%20Release.ashx?App=Announcement&amp;FileID=672229" target="_blank" rel="noopener">Link</a></td>
</tr>
<tr>
<td style="width: 50%;">SMM SP Presentation</td>
<td style="width: 50%;"><a href="https://links.sgx.com/FileOpen/Presentation.ashx?App=Announcement&amp;FileID=672230" target="_blank" rel="noopener">Link</a></td>
</tr>
<tr>
<td style="width: 50%;">SMM SP Trading &amp; Liquidity Update</td>
<td style="width: 50%;"><a href="https://links.sgx.com/FileOpen/Trading%20and%20Liquidity%20Update.ashx?App=Announcement&amp;FileID=672231" target="_blank" rel="noopener">Link</a></td>
</tr>
<tr>
<td style="width: 50%;">KEP SP Media Release</td>
<td style="width: 50%;"><a href="https://links.sgx.com/FileOpen/MREL_KCL%20Announcement%20-%2024%20Jun%202021.ashx?App=Announcement&amp;FileID=672253" target="_blank" rel="noopener">Link</a></td>
</tr>
<tr>
<td style="width: 50%;">KEP SP Media &amp; Analyst Briefing</td>
<td style="width: 50%;"><a href="https://links.sgx.com/FileOpen/TRSCR_%20KCL%20Briefing%20to%20Media%20and%20Analysts%20-Transcript.ashx?App=Announcement&amp;FileID=672341" target="_blank" rel="noopener">Link</a></td>
</tr>
</tbody></table>

Less that a year after a massive rights issue, Sembcorp Marine (SMM SP) has announced a big rights issue to strengthen its financial position and accelerate its pivot towards renewable and clean energy.The recapitalisation will be done via a 3:2 renounceable rights issue at a price of S$0.08/share, representing a 58.12% discount to the last close and a 35.69% discount to the Theoretical Ex-Rights Price (TERP).Temasek (via Startree Investments) has committed to subscribe to its 42.6% entitlement and will underwrite part of the excess rights so that its total subscription will not exceed 67% of the rights issue. DBS (DBS SP) is underwriting the remaining 33% of the rights issue.Sembcorp Marine (SMM SP) and Keppel Corp (KEP SP) have also commenced talks on a potential combination of Keppel O&amp;M and SMM to create a stronger player and to accelerate the pivot to energy transition.We expect Sembcorp Marine (SMM SP) shares to open lower and possibly trade lower in the near-term. The stock trades at high valuations and shareholders looking at the longer term price charts have a right to be wary.Links

Detail
Link


SMM SP Press Release
Link


SMM SP Announcement
Link


SMM SP Media Release
Link


SMM SP Presentation
Link


SMM SP Trading &amp; Liquidity Update
Link


KEP SP Media Release
Link


KEP SP Media &amp; Analyst Briefing
Link



Sembcorp Marine: BIG Rights Issue & Potential Combination with Keppel O&M

Singapore

Keppel Corporation Limited's core businesses are offshore and marine, infrastructure, property investment and development, telecommunications and transportation, energy, and engineering.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Keppel Corp (KEP SP)

Last Week in Event SPACE: Afterpay, SPH, ESR Cayman, Prosus/Naspers, Kingsoft, Milton, SOHO China

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

SPH’s Privatisation by Keppel

SPH announced a privatisation offer from Keppel for a total consideration is S$2.099 per share. While the implied offer price is not a knockout...

Arun George

Alamak! SPH Restructuring Restructured as Keppel Bo Jios SPH Holders

SPH and Keppel have a deal. Keppel will take over SPH post-Media spinoff, paying cash and shares in two REITs. It's a bit cheap, a bit ugly. But...

Travis Lundy

Sembcorp Marine Bites the Bullet - Big Rights Offering - And May Combine with Keppel O&M

SMM did a disastrous rights offering last year - an equity/debt swap. Now they do a REAL ONE to raise more money. There is nothing good here near...

Travis Lundy

Sembcorp Marine: BIG Rights Issue & Potential Combination with Keppel O&M

A big rights issue of S$1.5bn from SMM SP could see the stock trade lower. A potential merger with Keppel O&M could provide a bright spot....

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)