facebookSembcorp Marine Ltd (SGX: S51) and Sembcorp Industries Limited (SGX: U96) are going to separate. What are your thoughts? - Seedly
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Anonymous

24 Jun 2020

Sembcorp Marine Ltd (SGX: S51) and Sembcorp Industries Limited (SGX: U96) are going to separate. What are your thoughts?

Sembcorp Marine and Sembcorp Industries announced on 8 June 2020 that there'll be a rights issue to raise money for Sembcorp Marine and a demerger of the two companies. Do you like the deal?

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    What are your thoughts?

    This deal is definitely good for Sembcorp Industries holders!

    For Sembcorp marine holders, not subscribing to the rights will dilute existing shares.

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      SG Invest St-neve

      SG Invest St-neve

      24 Jun 2020

      Level 4ยทManager at SG INVEST by ST-NEVE

      If you are owner of SCM shares right now, the best option is to buy the stock at $0.20 per share.

      A great example will be SIA rights issues.

      During the Rights Issue Exercise, SIA offer $3.00 per share and the market price nose dive to under $3.50 per share.

      Case in Point:

      1. SGX Blue Chip Stock - Market sentiment always regard these stocks as high valued stocks and it would be unthinkable for it to go below $3.00. Temasek and SIA managment has already calculated the risk and determine the value at $3.00 which means they were pretty confident market forces will not push it below $3.00.

      2. In the event, there is no traction to buy the shares, Temasek will buy up. This is win-win.

      3. As you can see, right after the Exercise was completed, SIA rebounded above $4.00 per share.

      So based on these recent examples and huge financial backing from the Temasek, they have probably made their calculations.

      SCM issuing shares for $0.20 per is unprecedented and it spooks investors but it should be a no-brainer for anyone with logic and sense.

      Of course there is every possiblity the shares will nosedived but the probability is low.

      I own S51 shares and this is a no-brainer to buy in the shares at $0.20 per share. My expectation that it would hover aroung $0.50 per share after the rights issue.

      Fingers crossed. โ€‹โ€‹โ€‹

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        The whitewash resolution may not pass, and if it doesn't, the entire deal (SCI and SCM rights issue ...

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