$SEMBCORP MARINE LTD(S51.SI)$Pricing will definitely go down when market trading resumes afterthe rights exercise period. I have exercised 2 other rights this year; Mapletree Industrial and Ascendas.Both pricing went down but higher than the PO price. But the main difference is that the rights offer for Mapletree and Ascendas are for funds to be raised for expansion.
Remember that SCM is raising funds to buy over the losing money Oil&Marine segment for Keppel. That’s why Keppel price rise after this announcement. To buy over a failing asset and this is the 2nd rights issue within a year. If you look at the balance sheet for SCM, how much can this round of funds issue last? At the most till mid 2022. How much lower can the next rights issues be priced? $0.04?
Temasek will cover the rest if shareholders are not keen, so this is a good thing.
Short term, price will fall.
But remember SCM going into green energy. So medium to long term, it depends on how successful is SCM transition into the new energy biz.
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