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Industrials: Sembcorp Marine and more

In today’s briefing:

  • Sembcorp Marine Rights Done – The MGO Option It Is

Sembcorp Marine Rights Done – The MGO Option It Is

By Travis Lundy

The Sembcorp Marine (SMM SP) Rights Offering is complete, and allocations are out as of Friday night.  and it turns out, the MGO Option as discussed in One More Day To Trade Sembcorp Marine Rights, Harvest the Spread, or Buy The MGO Optionas rights trading was coming to a close, was the right way to think about it. 

Only 84.2% of the Offering was covered by shareholders exercising their rights. Temasek took 42.6%, which means that only 72% of the other shareholders took up their rights. That meant that based on the Offering Circular and the Temasek Undertakings therein, Temasek was going to end up increasing its stake by more than 1%, thereby triggering an MGO Option (it required 98.33% minority takeup to avoid going over the MGO trigger).

As I described it, there was still potential risk of MGO non-completion, and the results of the Rights Issue seems to suggest there is still potential risk of MGO non-completion.

More below the fold.

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