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Sembcorp Industries, Sembmarine respond to shareholder queriesBoth firms assured that the demerger deal is in the best interests of shareholders.
If any one of the resolutions proposed at the SCI EGM or the SCM EGM is not approved, SCI would retain its current shareholding in SCM, the latter’s $1.5b subordinated loan owing to SCI will remain outstanding, and the critical need to address SCM’s liquidity requirements will not be met.
“If that were to happen, SCM’s strenuous efforts to recapitalise and strengthen its balance sheet will be negated and the
critical need to address its liquidity requirements will fail.
Sembmarine added, if ever they failed to gain shareholder approval, that the various capital raising alternatives considered include debt financing, equity-linked debt and equity issuance.
“Faced with the urgency of the situation to
recapitalise SCM, the rights issue is the most optimal solution and is in the best interests of shareholders. The rights issue has the support of both SCM’s parent company, SCI, which has undertaken to subscribe for up to $1.5b of rights shares under the rights issue, and its ultimate holding company, Temasek, which has sub-underwritten the balance $0.6bn of rights shares under the rights issue,” Sembmarine stated.
For the transaction to proceed, SCI explained that there are in total three resolutions that need to be approved for the proposed distribution and the proposed SCM rights issue.
For SCI, only one resolution will be tabled: an ordinary resolution to approve the proposed distribution. The resolution requires the approval of a simple majority (>50%) of SCI shareholders who are voting at the SCI EGM, whilst Temasek will abstain from voting on this resolution.
For SCM, two resolutions will be tabled: an ordinary resolution to approve the proposed SCM rights issue and a whitewash resolution with respect to the proposed distribution. Both resolutions require the approval of a simple majority (>50%) of SCM Shareholders who are voting at the SCM EGM, where Temasek will also abstain from voting in on the whitewash resolution.
SCI also noted that the three resolutions are inter-conditional.
Following the demerger, SCI pledged to focus on unlocking value for shareholders, executing their transformation plan to create long-term value for our stakeholders.
“The rights issue will provide SCM with the much needed recapitalisation to ride out the industry downturn, to strengthen its balance sheet and reposition the company for its long term viability. It is beneficial to the company and all shareholders,” Sembmarine added.
Source: Business Times
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