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Ezion is heavily in debts to the tune of 1.5 billion. They have 6 years to turn this around with the low interest loan package they have eked out.
With a cash generation ability of 60 mil per year and possibly 100 mil with full deployment of fleet. Current shareholders of Ezion should not be expecting any dividends until probably 10 years time. The optimistic scenario is to hope that charter rates of liftboats double from current depressed rate to bring in cashflow of 200+ mil per year and the company is saved. I am hoping the current Ezion mgmt is not dumb enough to buy more PPE. Just make do with current fleet and do not continue leveraging.
Mr Chew's rah rah speech during AGM was just noise to me. He is the same person who was optimistic of the liftboat segment 3-4 years back and took massive CAPEX which brought Ezion to its knees; during this time he drew an annual remuneration package close to 2 million. If Ezion does turnaround, it is not due to capability of the current mgmt but simply due to the industry's turnaround. I have started investing in Ezion because I believe the industry is turning around and not because of the "brilliant" management of Ezion.
I think Pavilion did quite a thorough due diligence on Ezion and the price of their entry is likely where Ezion will be when the industry turns around.
For info, the current NAV of Ezion is only 13 Singapore cents and not 17.5 cents as posted by other members.
There were about 600 million new shares that were issued post 17 April 2018. On 18 April 2018, there was 2.341 Billion shares. As of end April 2018, there is already 3.093 billion shares. Pavilion Capital and RSM were given a total of 200 million shares. This leaves about 400 million shares unaccounted for. I believe shareholders are not foolish enough to exercise their warrants now given the depressed prices. Hence, my personal suspicion is that quite a substantial bond holders cut their losses by converting their bonds into shares and then selling at a loss. This is why Ezion's shares have been sold down as of late.
With a cash generation ability of 60 mil per year and possibly 100 mil with full deployment of fleet. Current shareholders of Ezion should not be expecting any dividends until probably 10 years time. The optimistic scenario is to hope that charter rates of liftboats double from current depressed rate to bring in cashflow of 200+ mil per year and the company is saved. I am hoping the current Ezion mgmt is not dumb enough to buy more PPE. Just make do with current fleet and do not continue leveraging.
Mr Chew's rah rah speech during AGM was just noise to me. He is the same person who was optimistic of the liftboat segment 3-4 years back and took massive CAPEX which brought Ezion to its knees; during this time he drew an annual remuneration package close to 2 million. If Ezion does turnaround, it is not due to capability of the current mgmt but simply due to the industry's turnaround. I have started investing in Ezion because I believe the industry is turning around and not because of the "brilliant" management of Ezion.
I think Pavilion did quite a thorough due diligence on Ezion and the price of their entry is likely where Ezion will be when the industry turns around.
For info, the current NAV of Ezion is only 13 Singapore cents and not 17.5 cents as posted by other members.
There were about 600 million new shares that were issued post 17 April 2018. On 18 April 2018, there was 2.341 Billion shares. As of end April 2018, there is already 3.093 billion shares. Pavilion Capital and RSM were given a total of 200 million shares. This leaves about 400 million shares unaccounted for. I believe shareholders are not foolish enough to exercise their warrants now given the depressed prices. Hence, my personal suspicion is that quite a substantial bond holders cut their losses by converting their bonds into shares and then selling at a loss. This is why Ezion's shares have been sold down as of late.