Conscious decoupling

Sembmarine will no longer be a drag on parent Sembcorp Industries after a rights issue and demerger. Can the offshore unit recapture its glory days?

SINGAPORE (June 12): For the last half decade or so, Sembcorp Marine (Sembmarine) has been hit by declining revenue and several annual losses amid a severe slump in the oil industry. As a result, the consolidation of its weak performance has been a drag on its parent company, the conglomerate Semb­corp Industries. However, the latter has pa­tiently kept faith with the offshore services provider in the hopes that it will eventually turn around as and when the oil industry re­covers. That is until now.

On June 8, both companies jointly announced a demerger that will result in the cessation of Sembmarine as a 61%-owned subsidiary of Sembcorp. This will come after a recapitali­sation exercise of Sembmarine.

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