Sembmarine reports improving debt profile from Q4 cash collections

SEMBCORP Marine’s (Sembmarine) net debt to equity ratio as at end-2022 has improved further to 0.26 times, from 0.53 times as at end-September 2022.

This was mainly due to cash collections in Q4 of 2022 from long-term receivables as well as progress and delivery payments from projects from the group’s customers, said Sembmarine on Monday (Feb 6).

The cash collected will be used to settle payables and other working capital needs in FY2023.

Sembmarine’s update was released in response to comments on a Jan 31 circular regarding its proposed combination with Keppel’s offshore and marine (O&M) arm.

This comes ahead of the group’s upcoming extraordinary general meeting for Sembmarine shareholders to vote on the deal on Feb 16.

The group said its circular presented a “balanced position” on the potential consequences should the merger not proceed. This was in reference to media comments (*see amendment note) that the company was fearful its “death knell” could sound in the event of the deal’s failure.

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

The group reiterated that its independent directors are recommending that shareholders vote in favour of the proposed combination with Keppel O&M – adding that all of its directors are beneficial shareholders of Sembmarine, and will vote in favour of the deal.

To recap, a proposed merger of Sembmarine and Keppel O&M was first announced in April 2022.

Its terms were subsequently revised in October such that Sembmarine would directly acquire Keppel O&M from Keppel Corp at the revised equity-value exchange ratio, resulting in Sembmarine shareholders owning 46 per cent of the enlarged entity.

On the other hand, Keppel will retain 5 per cent of its remaining 54 per cent ownership of the combined entity, and distribute 49 per cent of the enlarged Sembmarine shares in specie to its shareholders.

Sembmarine will also retain its listing status on the Singapore Exchange mainboard, and directly issue new shares to Keppel.

Keppel shareholders in December voted overwhelmingly for the merger with 99.96 per cent of votes, translating to 562.8 million shares, cast for the proposal.

Shares of Sembmarine : S51 0% ended Friday down S$0.006 or 4.1 per cent at S$0.139. 

Amendment note: This article has been edited to clarify that the statement was made by media sources, and not Sembcorp Marine.