Hot stocks: Sembcorp, Sembmarine see active trading on demerger confirmation

HEAVY volumes of Sembcorp Industries (SCI) and Sembcorp Marine (SMM) shares changed hands on Tuesday afternoon after shareholders gave the green light for the firms' two-part proposal.

Both SCI and SMM had halted trading for the first half of the day prior to their extraordinary general meetings (EGMs).

They lifted the halts during the midday break, after which investors became active. As at 3.37pm on Tuesday, more than 16 million SCI shares and 13.8 million SMM shares had been traded.

Price-wise, both stocks experienced swings, reflecting mixed sentiments across the market. SCI rose nearly 4 per cent or S$0.075 within the first three minutes of the afternoon session to hit an intra-day high of S$1.975, but lost the gains to trade at S$1.85 by 3.39pm, down S$0.05 or 2.6 per cent from the previous close. The counter briefly touched an intra-day low of S$1.84 at around 2.57pm.

SMM advanced 2.9 per cent or S$0.01 in the first five minutes to S$0.36, before sinking 5.1 per cent or S$0.017 to S$0.333 at about 2.46pm. It recovered slightly to trade at S$0.345 as at 3.50pm, down 1.4 per cent from Friday.

On Tuesday morning, SCI and SMM held EGMs to table three inter-conditional resolutions to their shareholders. These include SCI's move to distribute its SMM shares in specie, SMM's rights issue, and a whitewash resolution that will waive investors' rights to receive a mandatory takeover offer from Temasek.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Shareholders voted overwhelmingly in favour of the resolutions. For SMM, 98.76 per cent voted for the rights issue, while 87.72 per cent voted for the whitewash resolution. Meanwhile, 99.67 per cent of SCI shareholders were in favour of the proposed distribution. 

SMM had repeatedly stressed that the rights issue would provide the company with the "much needed recapitalisation", or additional cash of approximately S$0.6 billion, to ride out the industry downturn, strengthen its balance sheet and reposition the firm for long-term viability. 

Both companies had urged investors to vote in favour of the three inter-conditional resolutions tabled at the EGMs, as the deal would fall through if any resolution was not passed.

KGI analyst Joel Ng said the successful outcome of the transaction signalled a "beginning of an offshore and marine (O&M) industry consolidation in Singapore," adding that similar consolidations have been taking place in countries such as China, South Korea and Europe. 

Another O&M player, Keppel Corp, shed 10.9 per cent by 3.46pm on Tuesday after Temasek Holdings pulled the plug on its S$4 billion partial offer for the conglomerate.

Mr Ng said the withdrawal meant that Temasek now has a war chest of S$4 billion and is likely to redeploy the capital in the Sembcorp companies.