Ezion Holdings

[CY09]

http://infopub.sgx.com/FileOpen/Ezion_An...eID=392053

Ezion is issuing free warrants to shareholders at 0.50 exercise price. I wonder how many will exercise such rights.

also in its latest FY results, PPE is at US 2 billion dollar and the business seems to need expensive capex to sustain operations but don't deliver a great profit level. Given the poor sentiments and yet adding so much expensive capex, I will like to quote what i said in otto marine's thread "How much is it (the PPE) actually worth and how will it affect overall NAV."

[dydx]

Do watch out this over-geared animal - 31Dec15's Total Gross Debts: $1605.0m, Net Debts: $1375.3m - which has been producing more like accounting profits over the years through rapid expansion in the big-ticket offshore equipment rental market, funded by ever-increasing debts. The latest 4Q numbers also confirmed operating cash-flow is faltering, with Revenue down 19% yoy to $84.755, and Trade Receivables at $193.247m is now equivalent to 6.8 months of current sales! - indicating signs of a serious collection situation. Do also note that management has deliberately lumped impairment loss on plant and equipment and provision for trade receivables under one big item of $81.128m in the notes to the P&L as well as in the CF Statement, so the real collection and bad trade debt problems could be worst, and going forward a lot more impairment loss on PPE could be required.

http://infopub.sgx.com/FileOpen/Ezion_4Q...eID=391953


In such a difficult financial situation, usually an aggressive timely asset sale, coupled with a new capital infusion by a strong controlling shareholder, could save the day!

[specuvestor]

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.

^^agree... they are same pot

Buy 7% Ausgroup somemore... even more garang than Ezra

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

Ezion and Ezra have same playbook

[CY09]

Another forgotten stock of the oil boom, so lets update recent turn of events here.

Ezion has recently raised a rights issue of 3 new shares for every 10 at the price of $0.29. It is to mainly fund its expansion and working capital.

Full year FY turned out 208 mil in op cash flow, which was all ploughed back into CAPEX which sucked up 377 mil.. (not a very good sign)

Moving forard, it will be important to see Ezion's next full FY results before deciding if it is a good company. To me, the company must be cash flow positive and of a certain ratio to be a credble investing candidate.

At a share price of $0.37, Mr. Market is assuming that PPE+receivables+JV stated on Ezion's balance sheet are worth 80% of its stated value.

However, what is interesting is that in 2015, Ezion raised a 5 yr 100 mil bond at a rate of 3.65%, which retail investors are protected from. This is because DBS will pay the amount in the event that Ezzion defaults, by converting it into a loan to Ezion.

<interested, and now monitoring>

[dydx]

Now trading on ex-rights basis (since 7Jul16), Ezion fell by another $0.03 (or 8.1%) to close at $0.34 today (25Jul16). This is only $0.04, or 13.8%, above the $0.29 subscription price of the 3-for-10 rights issue due for payment by 28Jul16 (this coming Thursday). If the share price falls further in the next 2 days, it is conceivable that quite a big percentage of those shareholders/holders of the rights would simply choose to forgo them and not put in their share of the new capital, resulting in the underwriters - DBS, UOB and Maybank Kim Eng - having to take up the tab. This is a rather scary situation, as the 3-for-10 rights issue at $0.29 was priced on 30Jun16 at a huge 37.89% discount to the 30Jun16 closing share price of $0.52. Today's closing share price at $0.34 is already 27.2% lower than the derived theoretical ex-rights price of $0.46.69.

So todate Mr Market has decided not to attach any additional value to the rights issue. In fact, Mr Market has marked down Ezion by a further 27.2%. Is Mr Market wrong or overly conservative in this instance? Whatever it may be, I would not dare to touch this stock even with a 10-foot pole!

[brattzz]

"DBS, UOB and Maybank Kim Eng" - this counter has got strong backings sia... :O
ezion/triyards, etc...

[CY09]

Bought Ezion today at 0.285. See how it turns out.

With banks pledging to support our local offshore industry, let's see if our banks have the liquidity to protect the stronger ones in the industry. My opinion is that the banks (especially DBS & OCBC) will be silly enough to support Swiber and Ezra because of political reasons of job protection and economic reason of letting them do asset sale slowly than go under a fire sale. This is to get more value to repay creditors.

Not in the least surprising, UOB has the least exposure.

[CY09]

Sold off Ezion with today's run up.

When the extra shares from the right issues are credited next week, let's see how the valuation of Ezion will be. The market volatility of the oil sector seems to indicate how Mr. Market is having difficulties ascribing the values to the smaller O&G, especially with the current fall in business sentiments. So here's a question, for the o&g sector where current order books are low and the true PPE value unknown; what will be a good way to value them now? Cash flow basis or the idea of liquidation value?

[BlueKelah]

Just value them as per ur usual valuation method.

If ur usual valuation method doesn't work then u have to ask what is wrong with ur method.

Should not change valuation method just because of changing circumstances in the sector and business

Sent from my MotoG3 using Tapatalk

[crabcrab]

Ezion ($0.345) - With oil price surge back to US$50 per barrel, Ezion share price has also firmed up to cross the right issue price of $0.29. Hopefully, oil price can substainwd to support the share price in the near future. Maybe time to relook this company at current valuation level..