Sembcorp is right to cast off its marine unit; both entities will be the better for it

IT has taken a pandemic to push industrial conglomerate Sembcorp Industries (SCI) into doing what was long overdue.

On Monday, the conglomerate unveiled a proposal that could see the firm fund the bulk of Sembcorp Marine's (SMM) S$2.1 billion recapitalisation exercise and then completely wean off the loss-making marine unit.

Travis Lundy, an analyst at Quiddity Advisors who publishes on SmartKarma, called the proposal a "very carefully-constructed technical move" by SCI to avoid increasing its short-term credit exposure to SMM.