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(28-02-2014, 04:26 AM)yawnyawn Wrote: not vested but i just saw that Marco Polo has a market cap of S$135m and it is now buying a jackup rig slated for delivery in 4Q2015 at US$214.3m, approximately S$271m, 2X its current equity!
They will have to borrow more money to finance this jackup rig, finance cost will rise. As of 31 Dec 2013, their gearing ratio was already at 96%. The business has not been generating FCF for the past few years.
Just borrow lor. Already stated that it will not issue right. 300mil Mtn is enough to play around.
Eps will go from 0.045 to maybe 0.15. Now based on their chartering business PE is already very high. In future 2016 if eps go to 0.15, where u think the share price go?. Company want to expand so negative fcf is ok. See how optimistic you are.
Anyway my calculaton of eps are only rough estimate.
The boss owe more than half the business, he will not want to ruin his own busoness without doing his math.