Keppel, Sembcorp Marine request trading halts pending announcements

Keppel Corp and Sembcorp Marine requested in separate filings for a halt in the trading of their shares pending announcements.
Keppel Corp and Sembcorp Marine requested in separate filings for a halt in the trading of their shares pending announcements.PHOTOS: KEPPEL CORP, SEMBCORP MARINE

SINGAPORE - Keppel Corporation and rig builder Sembcorp Marine (Sembmarine) on Thursday morning (June 24) requested in separate filings to the Singapore Exchange for a halt in the trading of their shares pending announcements.

Reuters reported after the filings that Keppel and Sembmarine are in the process of kicking off talks to explore combining their struggling offshore and marine (O&M) businesses, quoting two unidentified sources familiar with the matter.

Keppel declined comment while there was no immediate response from Sembmarine, Reuters said. 

Keppel announced in January it was exiting the rig business as its offshore and marine unit pivots to clean energy, following a strategic review.

Keppel Offshore & Marine would stop building offshore oil drilling platforms, after the oil price crash saw it post record losses of $1.19 billion last year.

Keppel O&M would be separated into three discrete parts, with two of the entities - Rig Co and Dev Co - holding its completed and uncompleted rigs respectively.

Keppel said then it was also exploring inorganic options for the O&M business.

Sembmarine, meanwhile, was recently fully demerged from its parent, Sembcorp Industries. Temasek, which is the biggest shareholder in Keppel and Sembmarine, dropped its plan last year to take a controlling stake in Keppel, following the company's poor financial results. 

Analysts have said a merger of Keppel and Sembmarine's rig businesses is critical to a consolidation of the struggling O&M sector in Singapore. Temasek's role in making a partial offer for Keppel and moving to directly own a stake in Sembmarine had been viewed as a step in that direction.

Keppel shares closed on Wednesday up six cents, or 1.2 per cent, at $5.11, while Sembmarine shares ended 0.2 cent, or 1.1 per cent, higher at 19.1 cents.