Ezra Holdings

[money]

2 for 1 with no mention of new income/investment

Survival is now an issue. With oil price so low now, quite hard to find stories that will talk about new income/investment

[Musicwhiz]

The thesis for Ezra hasn't changed much since I divested the Company back in 2009. It looks like it still manages to come up with financial engineering techniques in order to prolong the tenure of its debt. Not a single cent of free-cash-flow generated in the time I held it, till now (and that's 2005 till now).

[greengiraffe]

Don't know if I have mentioned this before with regards to SGX listed offshore support plays... its all a big concept.

Remember Tan Kim Seng - the man that made a lot of money selling his original flagship KS Energy to Indons?

KS Energy used to hold a strategic stake in Ezra or vice versa.

The early days of Ezra was touted as one of high growth companies that will benefit from a young fleet and deep sea exploration.

If I remember correctly, both Ezra and KS Energy booked substantial gains from sale of equity stakes prior to GFC. Pre GFC days saw gush of liquidity chasing "growth" disregarding operating cash generations.

Of course, commodity prices continued to be sustained at high levels post GFC on China pump priming to shield against effects of GFC and that of QE.

Unfortunately, after Tan cashed out of both KS Energy and Ezra pre GFC - this is when Ezra start to lose its concept with the delivery of its modern equipment.

Personally, I find that subsequent contract wins and even another bolt on purchase in Norway is highly questionable. Ezra's order books have always been in the billions but year after year there is hardly any results to show for and Ezra kept issuing debt papers after papers.

Then came the mysterious rise of Ezion - formerly known as Nylect Engineering - another vehicle by Tan. Ezion's model look questionably similar to that of Ezra except that it is focusing on another segment of the offshore industry. It is also another growth stock.

I do not follow Ezion very closely but from the little that I know, it is quite similar except that cash generation is better and there are accounting profits to show for. Of course, Ezion also have similar debt instruments but there are more strategic holders that are well known to the markets. Sometime last year, research house csfb started questioning the age of the fleet that Ezion has purchased - 30 year olds being touted as growth stories and that started the downfall of Ezion that coincided with the steep decline in oil prices.

In fact round about the same time, Tan is also involved in another new offshore play - Swissco.

Midas touch or not - it is for us to evaluate over time. To me the ultimate winner from all this offshore concept - Tan and his partners that seeded these plays over time.

The thesis for Ezra hasn't changed much since I divested the Company back in 2009. It looks like it still manages to come up with financial engineering techniques in order to prolong the tenure of its debt. Not a single cent of free-cash-flow generated in the time I held it, till now (and that's 2005 till now).

[newborn1000]

Times flies indeed..........GFC is but a distant past to the new generation

[propertyinvestor]

If the company didnt generate a single cashflow over the past years, how did they achieve a net book value of USD 1.31? Is there something wrong with this figure? Did they mark to market some quoted equity investments to achieve this unrealistic figure?

[Musicwhiz]

If the company didnt generate a single cashflow over the past years, how did they achieve a net book value of USD 1.31? Is there something wrong with this figure? Did they mark to market some quoted equity investments to achieve this unrealistic figure?

I said the Company did not generate any Free-Cash-Flow (FCF), but it certainly did generate positive operating cash flows (OCF)! OCF is insufficient though - a Company has to generate FCF in order to be able to sustain investments, pay out dividends and avoid undue reliance on banks.

Ezra has a simple "formula" - generate OCF, but spend a lot on capex and fixed assets (vessels in this case), while leaning heavily on the banks and capital markets for financing cash inflows. So you can definitely build up a Net Asset Value in this way - by continually leveraging using debt and relying heavily on banks, CB and financial engineering to get by. For now, the music is still playing.......

[HitandRun]

Sometime last year, research house csfb started questioning the age of the fleet that Ezion has purchased - 30 year olds being touted as growth stories and that started the downfall of Ezion that coincided with the steep decline in oil prices.

Since cs was mentioned, I cannot help but point out 2 glaring facts, i.e. that cs (and/or its clients) appears to have a big short position on Ezion and its analysts do not know squat about jack-up drilling rigs vs service rigs (or it was hoping that its readers cannot tell the difference).

[greengiraffe]

Ezra's rights issue that has yet to be priced is a scary one:

Raising $ to paydown debt pile and presumably to prevent a spiral of creditors and bankers charging down the street...

[mulyc]

The perfect short.

[greengiraffe]

Jelek, Ezra really desperate with deeply discounted rights offer:

http://infopub.sgx.com/FileOpen/Project%...eID=357000