OIR BITES: Temasek said to be selling 3% stake in Sembcorp Marine

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD

Research House: OIR BITES

Price Call: HOLD

Target Price: 5.70

OIR BITES: Temasek said to be selling 3% stake in Sembcorp Marine 6 Mar 2012

Dear TRs, According to Reuters, Temasek Holdings is selling 62.4m of its Sembcorp Marine (SMM) shares. This is about a 3% stake in SMM, and would raise about S$337m based on the last done price of S$5.40. Temasek owned 66.6m SMM shares as of Oct 2011 (based on Bloomberg data), so Temasek would be offloading almost its entire direct interest in SMM should the share sale occur. However, the group still has a substantial indirect stake in SMM through Sembcorp Industries (SCI) - Temasek has a 48.78% interest in SCI (as of Mar 2011), which in turn owns a 60.75% stake in SMM (as of Oct 2011). The price in which the shares would be sold as well as the timing of the sale is not known. Still, the release of this news may lead to a negative knee jerk reaction in SMM's share price. SMM's average daily volume traded is about 6.3m shares in the past three months; there may be a share overhang unless Temasek has already found its sellers. According to newswires' sources, UBS is handling the share sale. We have a HOLD rating with a S$5.70 fair value estimate on SMM.

Warm regards,

Company Registration No: 198301152E