Sembcorp Industries may buy back Sembcorp Marine to save it

Sembcorp Industries may buy back Sembcorp Marine to save it

Singapore’s Sembcorp Industries may inject funds into Sembcorp Marine or buy back the remaining 39% stake it does not already own in the shipyard to save it from ruin, reports say.

Analysts say drilling rig specialist Sembcorp Marine is at risk of writing off assets and cutting its full-year dividend as oil prices decline further, Reuters reports.

Financial support for Sembcorp Marine is urgently needed and taking the company back into private ownership is an easier option, sources said.

After going private, the yard could then be sold off to make a profit for Sembcorp Industries, in which state investor Temasek Holdings is a major shareholder. Analysts speculated that one buyer could be Sembcorp Marine’s larger rig-building rival Keppel Corp, which is 21% owned by Temasek.

Both Sembcorp Marine and Keppel have been building a number of drillships and rigs for indebted Petrobras-subsidiary Sete Brasil, which has not paid either yard since late 2014, reports say.

Shares in both Sembcorp Marine and Keppel are trading at their lowest valuations in at least 13 years, according to Thomson Reuters data.

Holly Birkett

Holly is Splash's Online Editor and correspondent for the UK and Mediterranean. She has been a maritime journalist since 2010, and has written for and edited several trade publications. She is currently studying for membership of the Institute of Chartered Shipbrokers. In 2013, Holly won the Seahorse Club's Social Media Journalist of the Year award. She is currently based in London.

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