Seeking share issue mandate at AGM a normal practice, it says
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SEMBCORP Industries' seeking of a share issue mandate at its upcoming annual general meeting (AGM) is an annual affair not to be interpreted as a disclosure that the company is currently embarking on a rights issue.
The Temasek-linked company said this yesterday in a swift response to a report that it was seeking a cash call.
The response also came on a day when Sembcorp shares took a hard knock.
'With reference to the Dow Jones report this morning that the company is seeking a rights issue at its upcoming annual general meeting, the company would like to clarify that every year at its AGM, it seeks shareholders' approval for a share issue mandate as permitted by the Companies Act and the SGX Listing Rules. In this year's notice of the 11th Annual General Meeting, the company has similarly included a resolution on the matter,' Sembcorp said in a morning announcement to the Singapore Exchange (SGX) after halting trading in its shares from 1040am to 1130am yesterday.
An observer hailed the fast response, saying that it was a timely reminder to all companies to be prompt in disclosures of material information, especially after the rare public reprimand handed by SGX to Neptune Orient Lines this week for not doing enough to quell market rumours that the shipping line was planning a rights issue.
Sembcorp said 'the practice of such resolutions every year is in line with market practice by listed companies, and the intent is to give the company flexibility to raise capital expeditiously should the need arise', adding that 'this mandate has been adopted and approved by shareholders at every AGM'. It then went on to say that 'the company would like to clarify that this resolution should not be taken as a disclosure that it is currently embarking on a rights issue'.
A Reuters report yesterday said that Sembcorp shares went down 4.5 per cent prior to the trading halt.
The stock closed trading at $2.07, a plunge of 17 cents or 7.6 per cent with more than 25.6 million shares changing hands for the day.
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