Ezion injects ~30% equity for 2013 projects

Just waiting for go signal.

According to Maybank Kim Eng, EDB Investments (EDBI) has given its vote of confidence to Ezion with a proposed subscription of new shares in the latter.

Here's more from Maybank Kim Eng:

Other than providing financing, we believe that EDBI could open gateways for Ezion to secure more contracts from prominent oil and gas players, given its extensive network.

We highlight that financing for Ezion’s announced projects have been secured. Ezion has put in the required ~30% equity and the rest would mainly come from project financing.

It has utilised about 60-70% of the SGD125m perpetual securities raised. With the remainder of its financial resources, we estimate that Ezion can take on another two USD80-90m type service rig contracts.

Following EDBI’s proposed investment, Ezion will have additional equity of SGD18.9m, and with better cashflows next year, Ezion will have greater capacity to take on more projects

Traditionally, Ezion secures its financing before announcement of any contracts. We view EDBI’s investment in Ezion not only as a positive sign of endorsement but also as a prelude to more contract wins.

Recent offshore orders wins saw rigbuilders, Keppel and Sembcorp Marine securing jackups built to work for Mexican NOC, Pemex. The last two service rig contracts secured by Ezion were also for the latter, reflecting Pemex’s aggressive drive in offshore activities.

Given Ezion’s good track record with Pemex (5 secured contracts), this could be a channel where new contract wins would come from in the near term.