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Ezion Holdings - OCBC Investment 2016-07-01: Undertakes rights issue at S$0.29/share; marks formal entry into Chinese offshore windfarm market

Ezion Holdings - OCBC Investment 2016-07-01: Undertakes rights issue at S$0.29/share; marks formal entry into Chinese offshore windfarm market EZION HOLDINGS LIMITED 5ME.SI 

Ezion Holdings: Undertakes rights issue at S$0.29/share; marks formal entry into Chinese offshore windfarm market

  • Ezion Holdings has proposed a renounceable underwritten rights issue of up to 487.3m new shares at an issue price of S$0.29 (~44% discount to closing price of S$0.52 on 30 Jun), on the basis of three rights shares for every 10 existing ordinary shares. 
  • DBS Bank, UOB and Maybank Kim Eng Securities are the joint underwriters of the rights issue. 
  • Under a “Maximum Subscription scenario”, the rights issue will raise S$137.5m in net proceeds; under a “Minimum Subscription scenario”, it will raise S$135.0m in net proceeds. 
  • 70% of the proceeds are earmarked for the potential acquisition of new offshore & marine assets, as well as the potential upgrading and modification of existing assets; the rest is for general working capital. 
  • Mr. Chew (CEO of Ezion) and his spouse will subscribe and pay for 43.34m rights shares entitlements and up to a certain number of excess rights shares (subject to availability), provided that the total value is up to S$50m, representing about 35.38% of the total rights share to be issued. 
  • Do note that Ezion’s shares will trade ex-rights from 9am on 7 Jul and the theoretical ex-rights price is S$0.467/share (based on current closing price). 
  • Meanwhile, Ezion has established Sinomarine & Teras (Tianjin) Offshore Co, a JV which marks the formal entry of the company into the Chinese offshore windfarm market. 
  • Prior to this, we had a HOLD rating with S$0.55 fair value estimate, which is now under review pending an analyst briefing this morning. 




Low Pei Han CFA OCBC Securities | http://www.ocbcresearch.com/ 2016-07-01
OCBC Securities SGX Stock Analyst Report HOLD Maintain HOLD 99999 Same 0.55


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