Bad when SembCorp Marine is taken private comes true

Performance of SembCorp Marine for 2015 was poor. It resulted in net loss of $289.6 million for the whole year. Net Asset Value was $1.2024 on 31 December 2015.

I read in Bloomberg that there is speculation that Temasek Holdings may take SembCorp Marine private. If this comes true, it will be bad for me as a retail investor.

SembCorp Marine’s share prices were good in the past since the time I invested in the counter.

Counter 27/12/2013 31/12/2014 31/12/2015
SembCorp Marine $4.42 $3.26 $1.75

Because of this speculation talk of privatisation, its share price rose 7.53% today.

Counter 15/2/2016 16/2/2016 Change
SembCorp Marine 1.46 1.57 7.53%

My average cost of investment was $3.343. Based on the current market price, my investment was down 53%. Could you imagine when SembCorp Marine is taken private, my investment would lose about 50% all of a sudden? I was of the view that if the stock is held for a longer term, there is a possibility that the offshore and marine business may turn around in the future. Have I got the choice?

Copyright © 2016, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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