🌦Plunging 17% over 10 ten days from 10 October 2025 after Seatrium’s client Maersk Offshore Wind unexpectedly terminated a US$475 million contract that was 98.9% completed, $Seatrium Ltd(5E2.SI)$ shares appear to have begun on a rebound
⚖The shares are 6.8% higher over the last 5 days on a SGX filing that Seatrium has rejected the notice of termination from Maersk for “wrongful termination”, as well as news that one of its clients TenneT has terminated another shipyard Petrofac’s services, giving rise to a possibility that the orders may be reassigned to another shipyard such as Seatrium
📝Macquarie Research (MQ) reported on the latter news on 23 October in a report stating whether they think Seatrium may benefit from this situation
What’s new
Petrofac announced on 23 October that customer TenneT has terminated its scope of work on the 2GW programme with immediate effect.
Recall that Petrofac was one of four shipyards that secured orders from TenneT in 2023 to build 14 units of offshore high-voltage direct current (HVDC) systems worth a total of EUR30 billion.
The four shipyards are: Seatrium (STM, 3 units), Dragados Offshore (3 units), McDermott (2 units), and Petrofac (6 units)
Why it matters
Potential for re-assignment of Petrofac's orders. MQ flagged in their Jan-25 report that the possibility exists for Petrofac's six HVDC orders from TenneT to be re-assigned if Petrofac's restructuring failed. Following today's news, MQ now believes the probability of a re-assignment to be higher.
Recap: TenneT has only formally awarded two out of the six orders to Petrofac, which has started work on both. Subsequent awards from TenneT appear to have been held back due to Petrofac's restructuring issues.
The remaining four HVDC contracts could be re-assigned, assuming Petrofac's two orders are retained. If these four units were equally split amongst the remaining shipyards, each would get at least one order. The contracts were originally awarded at EUR2 billion per unit.
MQ believes STM has a good chance of securing at least one unit or even more. Dragados Offshore had to build a whole new production site to support its orders and might lack capacity to take on more than one. McDermott cut steel for the first (of two) HVDC in Batam on Sep-25 and may not be able to meet delivery timelines for more than one. The odds, in MQ’s view, look favourable for STM if Tennet does re-assign the contracts
What now
• This is a positive development. MQ is on the lookout for a potential re-assignment/award of an HVDC contract from TenneT in the near term. MQ as an Outperform rating on STM with a 12-month target price of S$2.80 based on a EV/EBITDA stock methodology.
Note:
Macquarie Research is independent from the Warrants business, what the Macquarie Warrants desks quote from Macquarie Research may not reflect the complete analysis of Macquarie Research on the relevant company over time.
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Macquarie has listed a new Seatrium call warrant this morning $Seatrium MB eCW260330(RGZW.SI)$ https://warrants.com.sg/tools/livematrix/RGZW which will trade at SGD 0.021 vis-a-vis Seatrium’s $2.20 share price, moves approximately 3.7 times more than Seatrium shares based on its effective gearing level as of 835AM this morning.
Investors keen on gaining leveraged exposure to Seatrium shares may wish to consider this newly listed warrant which is also the trending warrant i.e. with the highest liquidity and tightest spreads. . Note: there is no put warrant available over Seatrium.
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