Keppel Corp - distribution of SembMarine shares

Update: 23rd Feb 2023

Ex-Entiltlement of 1:19.1 SembCorp Marine shares

Based on 22nd Feb 2023 SembCorp Marine transacted price of about 0.135 (note: Sembcorp Marine has been added to the MSCI Singapore Free Index (SIMSCI INDEX) at the close on 1 March which explains the price reversal upwards from the day before, post Keppel Corp announcement of in-specie distribution), the entitlement value works out to be 19.1 x 0.135 which works out to be approximately $2.58 .

This, versus the live KeppelCorp price correction of $1.80 as of 11:40 am today vs the theoretical amount of $2.58 seems reasonable - considering that the KepCorp holders will receive 19,100 shares for every 1,000 shares of Keppel Corp. However, not unexpectedly, some Keppel Corp holders might not want to keep SembMar shares - and it was sold down from opening price of about 0.135 to current price of 0.126-0.127 (as of 11.45 am)

Chronicles of events

Keppel Corp declared on February 16, 2023, that for every share held, shareholders would receive 19.1 SembCorp Marine (Sembmarine) shares. The distribution of these shares was approved by the Singapore Exchange Securities Trading Limited (SGX-ST) on February 22, 2023.

On February 16, 2023, Sembcorp Marine shareholders voted in favor of the merger with Keppel O&M, with over 95% of the votes in favor. The news of this announcement was made public on February 17, 2023, following the proposal of the combination between the two companies back in October 2022.

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Keppel Corporation has announced a distribution of 19,100 SembMarine shares for every 1,000 Keppel shares based on Straits Times’ news release 17th Feb 2023, Friday. 

The terms of the deal, which were first announced in April, were subsequently changed in October to make it more enticing to Sembmarine shareholders, who would now receive a slightly bigger 46 percent share in the new company compared to the prior arrangement's 44 percent. Keppel will obtain the remaining 54%, of which it will keep 5% and give its shareholders a distribution of 49% of the expanded Sembmarine share base.

Keppel Corporation and Sembcorp Marine have been involved in a merger, which was aimed to create a premier global player in offshore renewables, new energy, and cleaner OM solutions. The proposed merger between Keppel Offshore Marine (KOM) and Sembcorp Marine (SMM) was designed to enhance the competitiveness of the new company, as it focused on new orders in the renewables space. 

Moreover, Sembcorp Marine has recently received shareholders' approval (over 95%) to merge with Keppel Corps offshore and marine unit.

See ST’s announcement for more details:

Keppel announces distribution of 19,100 SembMarine shares for every 1,000 Keppel shares