Singapore-based Sembcorp Industries will provide a five-year subordinated loan of SGD 2 billion (USD 1.47 billion) to strengthen Sembcorp Marine’s financial position.
The loan, agreed amidst the current downturn in the global offshore and marine industry, would be used by Sembcorp Marine to retire around SGD 1.5 billion of borrowings, and the balance SGD 500 million for working capital and general corporate purposes.
Sembcorp Industries, Sembcorp Marine’s largest shareholder, will issue SGD 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.
Assuming the SGD 2 billion is fully drawn as at March 31, 2019, Sembcorp Group’s gross debt-to-capitalisation ratio would increase from 56% to 58%.
Since 2009, Sembcorp Marine 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.
However, The company’s current financial performance and position have been affected by the prolonged and severe downturn of the global offshore and marine industry.