SembCorp To Sell Marine Segment

SembCorp Logistics said on Monday it agreed to sell its marine business to PSA Marine, a unit of Singapore port operator PSA Corp, for S$207.5 million ($117 million).

The company said in a statement the sale would be satisfied fully in cash and represented about 1.35 times the proforma net tangible assets of the marine services business as at December 31, 2000. The sale of the marine services business (a 62 percent subsidiary of SembCorp Industries) is part of the company's long-term strategy to exit non-core businesses to focus on logistics, it said. The sell-off the company, which comprises harbor and ocean towage services, salvage operations and marine transportation, had long been expected.

Analysts said the proposed sale could be a catalyst for its share price, which had been pressured by doubts about how it could generate synergies from its tie-up with Swiss logistics company Kuehne & Nagel International (KNI). "It's not a core business for them. This could help their balance sheet," said an analyst. SembLog said that the effect of the proposed sale would reduce its earnings per share before extraordinary items for the year ended December 31, 2000 to $15.26 from $26.36, while earnings per share after extraordinary items would increase to $33.95 from $26.36.