Sembcorp, Sembmarine end lower after investors vote for demerger

Singapore

SHARES of Sembcorp Industries (SCI) and Sembcorp Marine (SMM) saw heavy trading on Tuesday after shareholders voted overwhelmingly in favour of their two-part recapitalisation and demerger proposal.

Both companies had halted trading for the first half of the day while the extraordinary general meetings (EGMs) took place for voting.

When trading resumed after the mid-day break, both counters rose briefly but ended the day lower.

SCI rose nearly 4 per cent or S$0.075 within the first three minutes to hit an intra-day high of S$1.975. It subsequently reversed those gains to fall as low as S$1.84 at 2.57pm. The counter ended at S$1.85, down 2.63 per cent from the previous close.

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 to S$0.333 at 2.46pm. It recovered slightly to close at S$0.34, or 2.86 per cent lower.

Both companies had repeatedly urged investors to vote in favour of the three inter-conditional resolutions tabled at the EGMs, warning that SMM had a bleak future without the recapitalisation.

At SMM, 98.76 per cent of the vote share was in favour of a rights issue to recapitalise the company, while 87.72 per cent voted in favour of a whitewash resolution that waives the need for Temasek Holdings to make a general offer for SMM after Temasek acquires its stake in SMM. Meanwhile, 99.67 per cent of SCI shareholders were in favour of the proposed distribution of SMM shares to SCI shareholders.

The successful resolutions for SCI and SMM come just a day after Temasek pulled the plug on its S$4 billion partial offer for Keppel Corp. This had resulted in Keppel's shares diving 11.11 per cent, or 60 cents, over the course of the day as investors scrambled to cut losses.

KGI analyst Joel Ng said the withdrawal meant that Temasek now has a war chest of S$4 billion and could redeploy the capital in the Sembcorp companies. Mr Ng added that the successful outcome of the transaction could mark the "beginning of an offshore and marine (O&M) industry consolidation" in Singapore.