Ezion Holdings

Typical KS Tan model - growing accounting earnings and consistent negative cashflows... eventually will be like Ezra's long drag for many dreadful years...

http://www.businesstimes.com.sg/companie...in-revenue

Ezion Q3 earnings up 29% on jump in revenue
Offshore marine group cites chartering contribution from deployment of additional service rigs

By
Malminderjit Singhmsingh@sph.com.sg@MalminderjitBT
7 Nov5:50 AM
Singapore

OFFSHORE marine group Ezion Holdings on Thursday posted a 29 per cent year-on-year surge in third-quarter net profit to US$49.2 million.

The better earnings for the July-September quarter came on the back of a 24.5 per cent rise in revenue to US$94.9 million from US$76.2

Market really has good appetite for high risks fixed income instrument...

http://www.valuebuddies.com/thread-3308-...#pid100190

Hello!

Will be grateful for some help here! I recently started looking into this company but I'm not understanding its financial statements. In section 18 of the notes to financial statements ("financial liabilities") in the AR 13, it seems to me that cash flow arising from secured and unsecured bank loans that are due within 1 year total about us$ 230 mil(pg 100). Given that cash flow from operations as stated in ar 13 is about us$155 mil, how would a company pay for such liabilities? is this a cause of concern?

Thanks in advance!

Hi,

While I have no thorough knowledge of Ezion's business, I can provide some comments. While it is true Ezion has US$230 Million liabilities due soon, it can do a few things: 1) Rollover the debt by asking the financiers to give them a new 1 year loan. technically, its a repay $230M+interest and get a new $230M.

2) Take advantage of low i/r environment and issue perpetuals- Ezion recently issued s$150m of 7% perpetual securities. So technically what Ezion can do is repay its US$230M of current liabilities with this new issuance.

3) Other ways including paying short term liabilities by using the proceeds of longer term debts

4) and simply using cashflow to pay debts

For Ezion and my limited knowledge of it, I think the company is employing a combination of option 1 and 2 to pay off its current liabilities. Tis should be one of your least concerns. As a shareholder, one should ask if Ezion's constant purchase of PPE/ Capex will be justified from the returns

(27-12-2014, 07:01 PM)BaCONFTW Wrote: Hello!

Will be grateful for some help here! I recently started looking into this company but I'm not understanding its financial statements. In section 18 of the notes to financial statements ("financial liabilities") in the AR 13, it seems to me that cash flow arising from secured and unsecured bank loans that are due within 1 year total about us$ 230 mil(pg 100). Given that cash flow from operations as stated in ar 13 is about us$155 mil, how would a company pay for such liabilities? is this a cause of concern?

Thanks in advance!

For Fu Yu, when served with letter of demand in 2007, it resulted in placement of shares in order to repay the banks:

http://www.finanznachrichten.de/pdf/2007...D26B.1.pdf

Fu Yu Corporation Ltd (the “Company”) wishes to announce that it was served with five letters of
demand (the “Letters of Demand”) on 1 October 2007 by solicitors acting for (i) DBS Bank Ltd; (ii)
Citibank, N.A., Singapore Branch; (iii) Citibank (China) Co., Ltd Shenzhen Branch; (iv) Standard
Chartered Bank; and (v) Standard Chartered Bank, Shenzhen Branch (collectively, the “Lenders”).
The letters of demand require the Company to make payment of a total sum of S$20,928,210.69 and
RMB 15,990,000.00 together with all accrued interest up to the date of full payment and the Lenders’
charges, costs and expenses by 8 October 2007 (the ”Debt”).

http://www.finanznachrichten.de/pdf/2007...0EB3.1.pdf

PROPOSED PLACEMENT OF 117,000,000 NEW ORDINARY SHARES

http://www.fuyucorp.com/images/IR/docume...oceeds.pdf

PLACEMENT OF 117,000,000 NEW ORDINARY SHARES IN THE CAPITAL OF FU YU
CORPORATION LIMITED AT AN ISSUE PRICE OF S$0.18 FOR EACH NEW SHARE
- UTILISATION OF NET PROCEEDS

Thanks for the comments! While im quite convinced of the liftboat business, I'm not sure if borrowing to pay off debts is the way to go. Sounds like a ticking timebomb to me, but i guess thats a personal preference . Will think about it more..

(27-12-2014, 10:50 PM)smallcaps Wrote:

(27-12-2014, 07:01 PM)BaCONFTW Wrote: Hello!

Will be grateful for some help here! I recently started looking into this company but I'm not understanding its financial statements. In section 18 of the notes to financial statements ("financial liabilities") in the AR 13, it seems to me that cash flow arising from secured and unsecured bank loans that are due within 1 year total about us$ 230 mil(pg 100). Given that cash flow from operations as stated in ar 13 is about us$155 mil, how would a company pay for such liabilities? is this a cause of concern?

Thanks in advance!

For Fu Yu, when served with letter of demand in 2007, it resulted in placement of shares in order to repay the banks:

http://www.finanznachrichten.de/pdf/2007...D26B.1.pdf

Fu Yu Corporation Ltd (the “Company”) wishes to announce that it was served with five letters of
demand (the “Letters of Demand”) on 1 October 2007 by solicitors acting for (i) DBS Bank Ltd; (ii)
Citibank, N.A., Singapore Branch; (iii) Citibank (China) Co., Ltd Shenzhen Branch; (iv) Standard
Chartered Bank; and (v) Standard Chartered Bank, Shenzhen Branch (collectively, the “Lenders”).
The letters of demand require the Company to make payment of a total sum of S$20,928,210.69 and
RMB 15,990,000.00 together with all accrued interest up to the date of full payment and the Lenders’
charges, costs and expenses by 8 October 2007 (the ”Debt”).

http://www.finanznachrichten.de/pdf/2007...0EB3.1.pdf

PROPOSED PLACEMENT OF 117,000,000 NEW ORDINARY SHARES

http://www.fuyucorp.com/images/IR/docume...oceeds.pdf

PLACEMENT OF 117,000,000 NEW ORDINARY SHARES IN THE CAPITAL OF FU YU
CORPORATION LIMITED AT AN ISSUE PRICE OF S$0.18 FOR EACH NEW SHARE
- UTILISATION OF NET PROCEEDS

Nothing special but just a note to myself if I re-read my post in the future. According to Edge magazine 2014 last edition, Ezion holds 49.99% of Charisma Energy (public listed shell) where it parked some of its offshore assets to avoid stretching its own balance sheet. This is really a smart move, by using minority shareholders to buffer for a few percentage points of shareholdings, JV with another big guy, use equity method to account of the asset which leads to a lower debt/equity ratio than holding the asset and it's financing. Salute! I wonder does it affect interest coverage ratios too as interest payments need to be consolidated to Ezion p&l? Hmm..

http://www.theedgemarkets.com/sg/article...plot-claim

SINGAPORE (May 18): Ezion Holdings ( Financial Dashboard) was sued by a partner which accused the Singapore-based offshore service provider of a conspiracy to induce an AP Moeller-Maersk unit to breach charter agreements.

Ezion created the impression Atlantic Marine Services, which it had agreed to charter oil rigs with to Maersk Oil, was in financial trouble, the Amsterdam-based company claimed in a lawsuit filed last month in the Singapore High Court.

A closed hearing is scheduled for June 2.

Atlantic Marine said in the suit it agreed to pay inflated charter rates to Ezion for the rig services provided to Maersk Oil to help the Singapore company secure bigger loans.

The claims are frivolous and without merit, Ezion’s lawyer Peter Doraisamy said.

Maersk Oil, which isn’t a party in the lawsuit, said it has terminated its contract with Atlantic Marine for its failure to meet contractual obligations.

Muralli Rajaram, a lawyer representing Atlantic Marine, declined to comment.

Ezion, which last week posted a 9.4 percent fall in first-quarter net income to $41 million, described the operating environment as “challenging” after a drastic drop in oil prices.

The case is Atlantic Marine Services v Ezion Holdings, S401/2015, Singapore High Court.

^^ somehow I'm not surprised

In the long term the market is a weighing machine

(21-02-2013, 06:21 PM)specuvestor Wrote: Agree Ezion and Ezra ROIC looks very capital intensive, and unconvincing on a FCF basis. But Ezra is the one with pattern more than badminton.

(08-04-2014, 10:47 AM)specuvestor Wrote: Buy 7% Ausgroup somemore... even more garang than Ezra

http://infopub.sgx.com/Apps?A=COW_CorpAn...0NXh1fQww8

Atlantic Marine Services withdraws suit against Ezion Holdings: http://btd.sg/1GOy88h