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Sembcorp Marine 2021 Rights Issue

 

 
SEMBCORP MARINE 2021 RIGHTS ISSUE - What is it about?


For every 2 Share, you are offered 3 Rights Shares @ S$0.08 each.


Full details of the Sembcorp Marine Rights issue are also available at:

https://www.sembmarine.com/investor-relations/sembcorp-marine-rights-issue-2021


SAMPLE CALCULATION

Say, you hold 20,000 shares of Sembcorp Marine, bought before 25 Aug 2021 (ie. bought before Ex-Rights).
You will be offered 20,000 / 2 x 3 = 30,000 Rights Shares.
If you wish to take up the Rights Shares, you will have to fork out 30,000 x $0.08 = $2,400.


WHERE TO CHECK QUANTITY

Rights Shares in CDP
There will be an Offer Information Statement (OIS) despatched to you on or around 31 Aug 2021.
Please keep a lookout in your letterbox.

Alternatively, on 31 Aug 2021 morning, you may also check via the following methods:

  • Log in to your online CDP account. There will be a notification that shows the quantity of Rights Shares you are allotted, or
  • Call CDP 24-hour Phone Service at 6535 7511 to check your shareholding balances (select Option 2). You will need to enter your 12-digit CDP number and a One Time Pin will be sent to your mobile phone. 
The rights distribution pay date is 30 Aug 2021, so you may even be able to see it in your CDP on 30 Aug 2021. 


Rights Shares in CPF / SRS
There will be a notification letter despatched from the bank (where your CPF Investment Account is held). Please keep a lookout in your letterbox.

Alternatively, please check with the bank that holds your CPF /SRS Investment Account.

*Note: Lyndell does not have access to your CDP / CPF / SRS so you will need to wait for the physcial letters or check the quantity yourself.


WHAT ARE MY OPTIONS REGARDING THESE RIGHTS SHARES?

1. Accept the Rights Shares

Rights Acceptance Period: 31 Aug - 14 Sep 2021

  • This is also known as subscribing or taking up the Rights Shares.
  • For this, you will need to fork out money to accept the Rights Shares.
  • You can calculate your breakeven price if you accept all the Rights Shares (see below).
  • You may also apply for Excess Rights Shares if you wish to (see below).
  • After this Rights issue, you will have more Sembcorp Marine shares (ie. original quantity + subscribed rights shares).
  • Please find acceptance steps below under Part I: How To Accept Your Rights Shares.


2. Sell off the Rights Shares

Rights Trading Period: 31 Aug - 08 Sep 2021

  • The Rights Shares are renounceable (ie. you can sell them off you don't wish to take up the rights shares).
  • For this, you will get back some money if you are able to sell at a good price.
  • Generally, the rights trading price is the difference between Sembcorp Marine price and rights price ($0.08). For example, if Sembcorp Marine price is $0.090, the rights will usually trade around $0.010.
  • Based on past Right issues, the first few days usually command better prices.
  • The Rights Shares are your entitlement and have value. Even if you do not wish to fork out money to subscribe, there is some value to be taken back during the rights trading period, so do not miss it! 
  • Quantity has to be substantial enough to cover brokerage to justify the selling. ie. if you have say 1,000 rights shares and the rights trading price is $0.010, it is not worth selling as the sales proceeds will not even be enough to cover the brokerage fees ($25). In such instance, it is better to either accept the rights offer or let the offer lapse.
  • Please see trading steps below under Part II: How To Sell Off your Rights Shares.


HOW TO CALCULATE YOUR BREAKEVEN PRICE IF YOU ACCEPT

Let's say, so far you have 20,000 shares of Sembcorp Marine in your CDP and your average price is $1.00 per share. You decide to subscribe to all the 30,000 rights shares, ie. buy 30,000 Rights Shares @ $0.08 per share, which means you fork out total $2,400.
 
Your average breakeven price will become:

($20,000 + $2,400) / 50,000 shares = $0.448 per share
 
You can see that taking up the rights will lower your breakeven price quite substantially from $1.00 to $0.448. 
 
The next step is to establish on whether you want to take up the rights to lower your price and await for Sembcorp Marine mother share price to appreciate (which may or may not happen, it's a judgement call that you have to make).  
 

EXCESS RIGHTS

You may apply for Excess Rights Shares (ie. more than the amount that you are offered).
Excess Rights Shares are not guaranteed.
Offered (allotted) Rights Shares are guaranteed.

If there are insufficient Excess Rights Shares to satisfy all valid excess applications by shareholders, the basis of allocation will be determined by Sembcorp Marine.


PART I: HOW TO ACCEPT YOUR RIGHTS SHARES

Rights Acceptance Period: 31 Aug - 14 Sep 2021

Please take note that there are different methods for accepting Rights Shares in CDP / CPF / SRS.


Rights Shares in CDP

Method 1: Acceptance via ATM (DBS/OCBC/UOB) (Most Popular & Convenient Method)

Electronic Applications may only be made through ATMs of the Participating Banks from Mondays to Saturdays between 7.00 a.m. to 9.30 p.m., excluding public holidays. 


1. Info to prepare:

  • Total number of Rights Shares you wish to apply (Allotment + Excess shares)
  • Your CDP number (12 digits starting with 1681)
  • Adequate funds in your bank account for the total amount that you are applying for

 

2. At the ATM:

  • Go under More Services / Investment Services.
  • Look for Rights Application and select "SEMBCORP MARINE R" and follow through.
  • Key in the total number of Rights Shares you wish to apply (Allotment + Excess shares)
  • The total $ amount will be deducted from your bank balance.
  • Once confirmed and submitted, you will receive a receipt. Please keep the receipt.

 

3. The Rights Shares will be issued to your CDP Account on or around 22 Sep 2021.

  • Your online CDP balance will reflect the Total quantity, which means Original quantity + Rights Shares quantity + successful Excess Rights Shares quantity. 
  • Unsuccessful Excess $ amount will be refunded to your bank account 

 

Method 2: Acceptance via PayNow (Most friendly method for current Covid-19 situation)

1. Refer to your offer letter ARE Form for the QR code. 

2. Scan the above QR code using your banking app or pay to UEN 198003912MCAS. 

3. Enter in the PayNow reference: XXXX <last 8 digits of your securities account (CDP) number> e.g. XXXX12345678. The PayNow reference is on the ARE Form.

4. Payment amount must correspond to the number of rights shares subscribed, including excess. 

5. Make payment by 9.30 p.m. on 14 September 2021. You do not need to return the ARE form.

 

Method 3: Acceptance via ARE form attached to Offer Information Statement (OIS)

1. ARE form attached to the OIS that is despatched to your letter box

  • You will need to get a Banker's Draft or Cashier's Order from the bank.
  • Instructions can be found in the OIS.



Rights Shares in CPF / SRS

1. Acceptance has to be done via the bank that holds your CPF / SRS Investment Account, that holds the Sembcorp Marine shares.

  • Please kindly contact the bank to accept the Rights Shares with your CPF / SRS Funds. You must have sufficient CPF/SRS funds to accept the Rights Shares.
  • After you use CPF / SRS Funds to accept the Rights Shares, the Rights Shares will be issued to your CPF / SRS Account on or around 22 Sep 2021.


*Note: Rights Shares in CPF / SRS cannot be accepted via ATM. It will be rejected.



PART II: HOW TO SELL OFF YOUR RIGHTS SHARES

Rights Trading Period: 31 Aug - 14 Sep 2021
 

1. Search and add Sembcorp Marine Rights Shares to your Online Trading Platform / App.

Rights Shares in CDP

  Online Trading Platform  

 

Search for "Semb" - Online Tading Platform


 

Select the name with R and/or R1 at the end

 

2. Sell off your Rights Shares


The difference between SembMarine R and SembMarine R1:

SembMarine R - Lot size is 100 shares. ie. the minimum to sell is 100 shares.
SembMarine R1 - Lot size is 1 share. ie. the minimum to sell is 1 share.

So, if you have 30,500 Rights Shares to sell, you can sell all 30,500 under SembMarine R.

But, let's say you have 30,587 Rights Shares to sell, then you will sell 30,500 under SembMarine R and 87 under SembMarine R1. 
*Both orders should be done within the same day so that only 1 time brokerage is charged. 

 

   Online Trading Platform   

SembMarine R - Online Trading Platform



Rights Shares in CPF / SRS

Please follow the same steps above (Rights Shares in CDP) and sell under Payment Type: Cash.
Thereafter, please contact Lyndell within the same day to amend it to CPF / SRS.

Sell as per normal, like how you sell your other stocks.


3. Sales Proceeds

After selling, the amount payable to you can be viewed the next market day under Account Mgmt > Outstanding Positions.

The payment will be as per normal, like how payments are made to you when you sell your other stocks through Lim & Tan.


4. What about the Offer Information Statement (OIS)?

If you have sold all your Rights Shares, you do not need to worry about the OIS or accept the Rights Shares anymore.

If you have sold partial of your Right Shares, then please remember to accept your balance Rights Shares accordingly.




Have a question regarding your Sembcorp Marine Rights Shares? Drop Lyndell a WhatsApp / Email / SMS.

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