Temasek backs Sembcorp Industries’ $1.1b bond issue

A woman passes a logo of state investor Temasek Holdings at their office in Singapore July 8, 2014. REUTERS/Edgar Su

Sembcorp Industries‘ S$1.5 billion ($1.1 billion) bond issuance aimed at strengthening the financial position of its marine and offshore engineering subsidiary Sembcorp Marine has found backers that include Temasek Holdings, the company said in a disclosure.

Sembcorp Industries, a Singaporean industrial conglomerate, is providing Sembcorp Marine with a five-year subordinated loan facility of S$2 billion to help it retire S$1.5 billion of borrowings amidst the current downturn in the global offshore and marine industry.

According to the disclosure, Sembcorp Marine will use the balance S$500 million ($369 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. Temasek is one of the bonds’ investors.

“The respective board of directors of Sembcorp Industries and SembMarine have considered a wide range of options and decided that the proposed financing option would be in the best interests of the companies,” the two companies said in a joint announcement.

The issue of the bonds has been approved by the Board of Directors and the Audit Committee of Sembcorp Industries.

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

It delivered strong and consistent performance for 15 years before 2014, with cumulative net profit of approximately S$5.4 billion.

“However, Sembcorp Marine’s current financial performance and position have been affected by the prolonged and severe downturn of the global offshore and marine industry,” the announcement said.

Early this month, Azalea Investment Management, a unit of Temasek, made a public offer for $132 million (S$180 million) Class A-1 private equity (PE) bonds – part of Astrea V PE Bonds – at a fixed interest rate of 3.85 per cent each year.

The public offer for Class A-1 bonds, the second listed PE bonds available to retail investors in Singapore, was announced after a placement to institutional investors, which witnessed strong demand.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.