Four oil-linked firms likely to be ineligible for latest government aid

But who are the two greatest beneficiaries?

The impact of recent government-back relief for Singapore Oil & Gas companies is not expected to be large, but every bit helps, said DBS Vickers Securities.

The Ministry of Trade and Industry has recently announced enhanced support measures for the marine and offshore engineering (M&OE) companies based in Singapore, in view of the intensifying financial challenges for the sector amidst a prolonged industry downturn.

The support is in the form of new incremental loan facilities from SPRING Singapore and IE Singapore available to Singapore-based M&OE industry players (see table on next page for definitions). This comprises i) the Bridging Loan facilities, which provides up to S$15m in borrowings to M&OE companies/groups for working capital purposes, and ii) the Internationalisation Finance Scheme (IFS), which was already in place, but its maximum quantum has been increased from S$30m to S$70m.

According to the research house, Pacific Radiance and Ezra are key beneficiaries while PACC Offshore Services Holdings (POSH), Nam Cheong, Vard, and Mermaid Maritime may not qualify.

Here's more from DBS Vickers Securities:

Within our coverage of SGX-listed OSV players and shipbuilders, we think PACRA and Ezra (including subsidiary EMAS Offshore) qualify for, and would benefit the most from, the S$15m Bridging Loan facility.

PACRA is 68% held by Mr. Pang Yoke Min, a Singaporean, and has its headquarters in Singapore, thereby qualifying as a candidate.

Ezra also has its headquarters in Singapore, and including its management's stake, we think the 30% local shareholding criteria should be met. These two names have been seeing negative cash flows and have relatively low cash balances; thus the Bridging Loan should make a positive impact, at least for a while.

Others such as POSH (c.81% held by the Kuok Group from Malaysia), Nam Cheong (majority Malaysian-entity held), Vard (majority Italian-owned and no operations in Singapore), Mermaid Maritime (c.76% held by the Thoresen group and related promoters based in Thailand) do not seem to meet the eligibility criteria.