SembCorp Marine (SCMN.SI - S$1.59; 3H): Sell: Not Decoupled from Customers' Challenges

Company filings - Petromena requires an additional ~US$300m funding for its 3 semi-subs under construction at SMM, of which ~US$100m needs to be raised by Apr 30 before delivery of the first rig. Options being explored: i) increase loan commitment for the first rig by ~US$100m, and the bank, in return, requests to be absolved from its commitment to fund the other two rigs. This will result in a financing shortfall of US$600m for two other rigs due in Sep 09 and Jan 10; ii) sell part or all of the rigs to make up for the shortfall, but could be challenging given current market conditions.