UPDATE 1-Temasek trims SembMarine stake, third portfolio sale in 2012

Mon Mar 5, 2012 11:11pm EST

* Third selldown for Temasek in a portfolio company this year

* Temasek still indirectly owns 60 pct interest in SembMarine

* SembMarine shares fall by as much as 5 pct, up 34 pct in 2012 (Adds analyst comments, details)

By Saeed Azhar

SINGAPORE, March 6 (Reuters) - Singapore state investor Temasek Holdings sold a 3 percent stake in oil rig-maker Sembcorp Marine, raising around $328 million ($261 million), as it builds up its war chest for investments.

Temasek, which manages about $150 billion in assets, has raised about $800 million since the start of the year in three significant selldowns in its portfolio companies. This included a 1.4 percent stake sale in India's ICICI ..

The selldowns came after it raised S$600 million from sale of zero coupon bonds exchangeable into shares of Hong Kong trading company Li & Fung Ltd in December.

"It could be a reshuffling of their portfolio to realise some gains," said Song Seng Wun, an economist at CIMB. "Perhaps they are taking a view that the global economy is becoming interesting and there are more opportunities in future."

A Temasek spokesman declined to comment. Temasek may be looking to invest in Europe after it hired former UBS CFO, John Cryan, as its European president in a newly created role in January.

Temasek is not the only one taking an advantage of a market rally to take profit on its investments.

On Tuesday, American International Group (AIG) raised about $6 billion by cutting its AIA Group stake while Citigroup Inc last month sold its stake in India's Housing Development Finance Corp for $1.9 billion

In the latest deal, Temasek sold 62.4 million shares in Sembcorp Marine at S$5.25 a share, according to a term sheet seen by Reuters. The investor has been a long-term investor in the company.

The final price was at the lower end of of a tight pricing range of S$5.25-S$5.30 a share, representing a discount of 2.75 percent versus Sembcorp Marine's last closing price.

Temasek would still own an indirect stake of about 60 percent in Sembcorp Marine through its majority-controlled firm Sembcorp Industries.

News about the sale, which broke late on Monday, sent Sembcorp Marine shares down by as much as 5 percent, although shares of the rig maker are still up 34 percent so far this year, beating a 12 percent rise in the benchmark Straits Times Index.

Analysts said Temasek may be booking a profit in Sembcorp Marine after its recent share surge.

"It's not a good signal for Sembcorp Marine because if a major shareholder like Temasek is selling its stake to take profit, it could be seen that the company's share price is hitting a peak," said Roger Tan, chief executive officer of SIAS Research.

"Average price-to-earnings ratio for comparable (stocks) is about 8.7 times, but Sembcorp Marine is doing close to 15 times. Valuation could be favorable for Temasek to take profit off the table," Tan said..

UBS is sole bookrunner on the deal, the term sheet said. ($1 = 1.2578 Singapore dollars) ($1 = 1.2578 Singapore dollars) (Additional reporting by Eveline Danubrata, Harry Suhartono and Daniel Stanton of IFR; Editing by Anshuman Daga)

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