With the completion of the Rights Issue of SembCorp Marine (SCM), the parent company SembCorp Industries (SCI) divested its shareholdings of SCM on 11 September 2020. This is done by distribution in specie of ordinary shares of SCM to SCI shareholders.
The distribution ratio is 4.911 SCM shares for every 1 share of SCI held by its shareholders.
Based on the closing price of SCM on 10 September 2020 of $0.182, the cash equivalent amount of dividend in specie was equal $0.8938 per SCI share.
On this basis, the shareholder cost of owning SembCorp Industries should be reduced by $0.8938 per SCI share.
As a shareholder of SembCorp Marine shares because of this dividend in specie, shareholder must attribute $0.182 to each SCM share he/she now has. That will be his/her cost of owning these SCM shares.
As to the stock market reactions to this SCM shares given to SCI shareholders, it appeared that SCI shareholders off-loaded their SCM shareholdings in the stock market. The closing price of SCM on 11 September was down 10.44% (-$0.019) to end at $0.163. Value traded was $40.2 million.
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