Further to an earlier announcement that a subsidiary of Ezion had entered into a letter agreement for a proposed issue of redeemable exchangeable preference shares, the subsidiary has now entered into a subscription agreement for the issue, raising net proceeds of about S$29.5m. Any dilutive impact will only be from Jul/Aug 2014 onwards, and is also small at 1.43% of the existing share capital. YTD, the group has raised close to S$290m of funds and most of the proceeds are for the acquisition of assets, due to the promising pipeline of opportunities that the group sees ahead. Maintain BUY with S$2.90 fair value estimate, which would drop to S$2.42 after adjusting for a proposed bonus share issue (details in 7 Aug 2013 report).
Redeemable exchangeable preference shares finalised
Further to an earlier announcement that a subsidiary of Ezion had entered into a letter agreement for a proposed issue of redeemable exchangeable preference shares, the subsidiary has now entered into a subscription agreement for the issue, raising net proceeds of about S$29.5m. The investors are five funds managed by Evia Capital Partners Pte Ltd and Venstar Capital Management Pte Ltd who are existing investors in Ezion.
Minimal dilutive impact
The holders of the preference shares can only exchange 50% of their holdings into ordinary shares of Ezion at a price of S$2.1857 a year from the issue of the pref shares. The remaining 50% can be exchanged after two years. Hence we expect any dilutive impact only from Jul/Aug 2014 onwards. Even then, assuming all the preference shares are converted, the dilutive impact is still small at 1.43% of the existing share capital. On the cashflow side, Ezion will see an inflow of S$29.5m this year from the net proceeds, and we expect about S$1.5m outflow in FY14, and S$0.9m each in FY15 and FY16 due to the preferred dividends.
Has been on the look-out for new funds…
Since the beginning of the year, the group has raised S$93.5m from a share issue (28 Feb announcement), S$110m from a 4.7% note issue (22 May announcement), S$30m from the above-mentioned preference shares, and was recently marketing a S$60m 4.6% note issue.
… for expansion purposes
Most of the proceeds so far have been earmarked for acquisition of offshore and marine assets, due to the promising pipeline of opportunities that the group sees ahead. YTD, Ezion and its related entities have secured letters of intent or contracts for seven units of liftboats and service rigs, and we expect more to come, given the good demand for such assets. Maintain BUY with S$2.90 fair value estimate, which would drop to S$2.42 after adjusting for a proposed bonus share issue (details in 7 Aug 2013 report).
Further to an earlier announcement that a subsidiary of Ezion had entered into a letter agreement for a proposed issue of redeemable exchangeable preference shares, the subsidiary has now entered into a subscription agreement for the issue, raising net proceeds of about S$29.5m. The investors are five funds managed by Evia Capital Partners Pte Ltd and Venstar Capital Management Pte Ltd who are existing investors in Ezion.
Minimal dilutive impact
The holders of the preference shares can only exchange 50% of their holdings into ordinary shares of Ezion at a price of S$2.1857 a year from the issue of the pref shares. The remaining 50% can be exchanged after two years. Hence we expect any dilutive impact only from Jul/Aug 2014 onwards. Even then, assuming all the preference shares are converted, the dilutive impact is still small at 1.43% of the existing share capital. On the cashflow side, Ezion will see an inflow of S$29.5m this year from the net proceeds, and we expect about S$1.5m outflow in FY14, and S$0.9m each in FY15 and FY16 due to the preferred dividends.
Has been on the look-out for new funds…
Since the beginning of the year, the group has raised S$93.5m from a share issue (28 Feb announcement), S$110m from a 4.7% note issue (22 May announcement), S$30m from the above-mentioned preference shares, and was recently marketing a S$60m 4.6% note issue.
… for expansion purposes
Most of the proceeds so far have been earmarked for acquisition of offshore and marine assets, due to the promising pipeline of opportunities that the group sees ahead. YTD, Ezion and its related entities have secured letters of intent or contracts for seven units of liftboats and service rigs, and we expect more to come, given the good demand for such assets. Maintain BUY with S$2.90 fair value estimate, which would drop to S$2.42 after adjusting for a proposed bonus share issue (details in 7 Aug 2013 report).
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