Sembcorp Marine secures $1.5 billion loan to position for offshore recovery

Sembcorp Industries is providing Singapore’s offshore rig builder Sembcorp Marine with a five-year subordinated loan facility of S$2 billion ($1.5 billion). The loan will strengthen Sembcorp Marine’s financial position amidst the current downturn in the global offshore and marine industry, the company has said. 

Source: Sembcorp Marine

According to its statement on Friday, Sembcorp Marine will be using the subordinated loan to retire approximately S$1.5 billion of borrowings, and the balance S$500 million for working capital and general corporate purposes.

Sembcorp Industries, Sembcorp Marine’s largest shareholder, will issue S$1.5 billion of bonds to DBS Bank as sole lead manager and initial purchaser through a private placement. The investors of the bonds include Temasek.

Sembcorp Industries will utilize the proceeds from the bonds to fund S$1.5 billion of the subordinated loan (which will be interest-bearing) to Sembcorp Marine, with the balance S$500 million to be funded by Sembcorp Industries’ existing available resources and facilities.

Assuming the S$2 billion is fully drawn as at March 31, 2019, Sembcorp Group’s gross debt-to-capitalization ratio would increase from 56% to 58%.

Sembcorp Marine said that, since 2009, it has made substantial strategic investments in yard and engineering capabilities, and acquired new technologies which allow it to offer diversified solutions across the offshore, marine and energy industries.

The company noted that for the 15 years before the current industry downturn, which started in 2014, Sembcorp Marine delivered strong and consistent performance. It was profitable every year with a cumulative net profit of approximately S$5.4 billion and distributed cumulative dividends of about S$3.5 billion.

However, Sembcorp Marine said that its current financial performance and position had been affected by the prolonged and severe downturn of the global offshore and marine industry.

“While the offshore and marine industry has shown signs of recovery, such recovery is expected to be gradual and sustained new orders for Sembcorp Marine will take time to materialize. Working capital needs have also increased, especially for major engineering, procurement, and construction projects. Sembcorp Industries and Sembcorp Marine believe that this financing will strengthen Sembcorp Marine, a key subsidiary of Sembcorp Industries, and better position it for the eventual recovery of the industry,” Sembcor Marine explained.

The respective board of directors of Sembcorp Industries and Sembcorp Marine have considered a wide range of options and decided that the proposed financing option would be in the best interests of the companies.


Spotted a typo? Have something more to add to the story? Maybe a nice photo? Contact our editorial team via email.

Offshore Energy Today, established in 2010, is read by over 10,000 industry professionals daily. We had nearly 9 million page views in 2018, with 2.4 million new users. This makes us one of the world’s most attractive online platforms in the space of offshore oil and gas and allows our partners to get maximum exposure for their online campaigns. 

If you’re interested in showcasing your company, product or technology on Offshore Energy Today contact our marketing manager Mirza Duran for advertising options.

Share this article

Follow Offshore Energy Today

Events>

<< Dec 2019 >>
MTWTFSS
25 26 27 28 29 30 1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31 1 2 3 4 5

Africa Oil Week 2020

For over 25 years Africa Oil Week has been the meeting place for Africa’s most senior E&P stakeholders.

read more >

CERAWeek 2020

 Each year, CERA clients gathered for a few days in Houston…

read more >

Offshore Technology Conference (OTC) 2020

The Offshore Technology Conference (OTC) showcases leading-edge technology for offshore drilling, exploration…

read more >

2020 EXPLORATION AND PRODUCTION STANDARDS CONFERENCE ON OILFIELD EQUIPMENT AND MATERIALS

The development of consensus standards is one of API’s oldest and most successful programs.

read more >

Jobs>

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply