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SINGAPORE (THE BUSINESS TIMES) – Sembcorp Marine’s (SembMarine) share rights issue to recapitalize the company was not subscribed, with valid acceptances and excess requests received for 9.4 billion shares of rights, or 90.2% of the almost 10,500 million shares of rights available.
According to the results of the application on Monday (September 7), SembMarine’s parent company, Sembcorp Industries (Sembcorp), subscribed 7.5 billion or 72 percent of the available shares by paying off a $ 1.5 billion loan that it extended to SembMarine in June 2019.
The quiet interest in the rights issue could be due to the fact that SembMarine shares were trading close to 20 cents in the last few days before the issue closed. With a negligible difference between the open market and rights prices, there was little incentive for shareholders to take over the rights.
Startree will eliminate the 1.03 billion shares with unsubscribed rights, according to the subscribe agreement. Startree is a wholly owned subsidiary of Sembcorp’s largest shareholder, Temasek, which will now have a direct stake in SembMarine.
The shareholders of Sembcorp and SembMarine voted vigorously in favor of the $ 2.1 billion recapitalization for SembMarine and the proposed spin-off for the two groups in August. In a previous presentation asking investors to support the recapitalization, SembMarine said the financing would help it weather the industry downturn, strengthen its balance sheet and reposition it for long-term viability.
It also noted that the change of control would affect only some of its banking facilities and that the banks support the transaction. SembMarine said it would expect banks to refinance existing loans and provide additional facilities if the recapitalization was successful.
SembMarine shares closed at 19.9 cents on Monday, an increase of 0.2 cents or 1.02 percent.
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