Singapore-listed Ezra Holdings that provides integrated offshore solutions to the oil and gas industry, said it plans to raise up to $300 million through a rights issue that will involve sale of shares to existing investors and issuing convertible bonds.
The company said it will use the proceeds to repay S$225 million fixed rate note and S$150 million perpetual securities.
The company further claimed that refinancing its debt would strengthen its balance sheet and also put it in “good stead to tap future growth opportunities”.
It plans to raise about $150 million from the rights issue and this will be used for the redemption of the S$225 million fixed rate notes.
It also intends to raise approximately $150 million of convertible bonds.
The move to raise additional capital comes as the company’s shares have fallen around 25 per cent this year on account sustained weakness in crude prices. “We are confident of the long-term prospects of the industry underlying the business segments of Ezra. With our net gearing lowered, we will be in a better position to bring more value to our shareholders. Further, we are maintaining our cost discipline with greater focus on cost-base rationalisation and optimisation to improve margins,” said Eugene Cheng, Ezra’s Group chief financial officer.
“In addition, with the delivery of our flagship subsea construction vessel, Lewek Constellation in the third quarter of FY2015, we expect significant revenue contribution thereafter. This will further improve operational cash flows for Ezra and in combination with the moderation of capital expenditures post-delivery of Lewek Constellation we expect to meet our planned capital expenditures and foreseeable debt maturities,” he added.
Credit Suisse (Singapore) Limited has been appointed as the sole financial advisor, sole global coordinator and lead manager of the rights Issue and the sole bookrunner of the convertible bonds Issue. Credit Suisse (Singapore) Limited and DBS Bank Ltd have been appointed as joint underwriters of the rights issue.