Keppel Corp trades ex-div: What you need to know as a shareholder

What happened?

Keppel Corp’s shares started trading ex-dividend at the market open on 23 February 2023. 

In other words, it is trading without the value of its distribution in specie of approximately 19.1 Sembcorp Marine shares per Keppel share held. 

This led to a sharp decline in its share price from its closing price of $7.34 on 22 February. At one point, it reached a low of S$5.13. 

Let us take a look at the few things you would need to know as a Keppel Corp shareholder. 

What you need to know about Keppel Corp distribution of Sembcorp Marine shares

Earlier this month, Sembcorp Marine shareholders voted in favour of the proposed combination between Sembcorp Marine and Keppel Offshore & Marine. 

Following the completion of the combination on 28 February2023, Keppel will receive approximately 36.8 billion shares of Sembcorp Marine with a total implied value of about S$4.5 billion.

It will then distribute in specie 49% of these shares 

#1 – Each Keppel Corp shareholder will receive approximately 19.1 Sembcorp Marine shares

Shareholders who hold Keppel Corp shares as at the Record Date will be entitled to receive approximately 19.1 Sembcorp Marine shares (rounded to one decimal place) for every one Keppel Corp share held.

Fractional entitlements to Sembcorp Marine shares will be disregarded.

#2 – What are the key dates to take note of?

• 23 February: Ex-distribution date
• 24 February 5pm: Record date

Your shareholding at this point in time will be used to determine your entitlement to Sembcorp Marine shares.  

• 28 February: Expected completion of the proposed combination between Keppel Offshore & Marine and Sembcorp Marine
• 1 March: Expected date of crediting SMM shares to eligible shareholders

Assuming that your stock trading account is credited with the Sembcorp Marine shares on 1 March 2023, you can commence trading the Sembcorp Marine shares at 9.00 am on 1 March 2023 provided that there is no trading halt on the Sembcorp Marine shares at that time. 

#3 – Will I receive odd lots of distribution shares?

Sembcorp Marine shares are trading in lots of 100 on the Singapore Exchange. 

As odd lots of Sembcorp Marine shares can be traded on the Unit Share Market of the SGX, there will be no separate arrangement made for the trading of such odd lots. 

Shareholders should note that the market for trading of odd lots of Sembcorp Marine shares may be illiquid.

Also, trading in odd lots of Sembcorp Marine shares may also incur a proportionately higher brokerage cost than trading in board lots of Sembcorp Marine shares.

#4 – How will Keppel’s Net Tangible Assets change after the transaction?

Following the completion of the transaction, Keppel expects to book a substantial disposal gain of about S$3.4 billion. This is because the sale of Keppel Offshore & Marine came at a price tag that is above the value that is being carried on Keppel Corp’s balance sheet. 

With the distribution in specie of about S$4.1 billion, Keppel’s net tangible assets will decline by about S$0.28 per share. 

This is because the distribution will be paid out largely from this disposal gain of S$3.4 billion.

What would Beansprout do?

With the transaction, Keppel expects to be able to accelerate on its Vision 2030 transformation and scale up on its focus areas including renewables, clean energy and decarbonisation.  

We also shared earlier that the combination between Keppel Offshore & Marine and Sembcorp Marine could drive an improvement in fundamentals of the new entity, with a potential for more orders and earlier return to profitability. 

Find out this could mean for Keppel’s share price in Beansprout’s stock analysis tool.

Related links

• Keppel Corp Share Price
• Keppel Corp Analysis
• Keppel Corp Dividends

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