Sembmarine reports improving debt profile ahead of Keppel O&M acquisition vote

Sembmarine’s update was released in response to comments on a Jan 31 circular about its proposed acquisition of Keppel O&M. PHOTO: SEMBCORP MARINE

SINGAPORE – 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 the fourth quarter of 2022 from long-term receivables as well as progress and delivery payments from projects from the group’s customers, said Sembmarine on Monday.

The cash collected will be used for payables and other working capital needs in financial year 2023.

Sembmarine’s update was released in response to comments on a Jan 31 circular about its proposed acquisition of Keppel Offshore & Marine (O&M).

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

The group said its circular presented a “balanced position” on the potential consequences of the merger not proceeding. This was in reference to its previous comments that the company was fearful its “death knell” could sound in the event of the deal’s failure.

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

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 would retain 5 per cent from its 54 per cent ownership of the combined entity, and distribute 49 per cent of the enlarged Sembmarine shares in specie to its shareholders.

Sembmarine would 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 closed at 14 cents on Monday, up 0.1 cent or 0.7 per cent. THE BUSINESS TIMES

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