In April, the group reportedly inked a conditional debt conversion agreement and conditional option agreement to purchase a 70% stake in Ezion
By SULHI KHALID / Pic By BLOOMBERG
YINSON Holdings Bhd is awaiting the due diligence process to complete its proposed acquisition of Singapore loss-making offshore asset supplier Ezion Holdings Ltd, according to Yinson group CEO and ED Lim Chern Yuan.
In April, the group reportedly inked a conditional debt conversion agreement and conditional option agreement to purchase a 70% stake in Ezion, with Yinson providing a cash outlay of US$200 million (RM824 million).
The group is expected to retain the listing status of Singapore Exchange Ltd (SGX)-listed Ezion.
Ezion also owns equity in two other SGX companies — a 42.4% stake in renewable energy company Charisma Energy Services Ltd; and a 26.4% stake in Alpha Energy Holdings Ltd, which has an interest in the Mustang oil field in Alaska.
“The targeted deadline is unfortunately not within our full control, so while we are waiting for approval, we continue our due diligence process,” Lim told the media after the company’s AGM in Kuala Lumpur yesterday.
Ezion recorded a net loss of US$344 million and has net liabilities of US$255 million for its financial year ended Dec 31, 2018.
It owns a total of 64 offshore assets comprising 12 lift boats, 17 jack-up rigs, five offshore support vessels, as well as 30 tugs and barges.
On Yinson’s recent partnership with Sumitomo Corp for a floating, production, storage and offloading (FPSO) vessel for the Marlim field in Brazil, Lim said the group will continue to collaborate with the latter on offshore projects abroad.
“We are bidding for three projects in Brazil,” he said.
Maybank Investment Bank Bhd in its research report published last month highlighted that Yinson could land two FPSO projects in Brazil as the group is the sole bidder and should win the tender on technical default, assuming it complies with all the necessary requirements.
“With the market tightening, Yinson could potentially end up winning three jobs — two in Brazil and one in Ghana, Aker Energy’s Greater Pecan tender.
“Establishing a new market enhances its franchise value/visibility and consolidates its future bids prospects there. Brazil is a key FPSO market with a strong tender pipeline — eight tenders for 2020-21,” the research house said.
Yinson’s net profit fell 17.5% year-on-year (YoY) to RM49 million for its first quarter ended April 30, 2019, due to impairment and foreign-exchange losses and lower revenue from its core business.
Revenue fell 11.1% YoY to RM209 million on lower contribution from its offshore and marine business that was negatively impacted by the cessation of the FPSO Allan charter at the Gabon-based Olowi field.
The group’s orderbook currently stands at US$4.9 billion.
Yinson’s share price reached an all-time high early this month at RM7.20 and closed two sen higher yesterday to RM7.12, valuing the company at RM7.82 billion.
Yinson is one of the world’s leading FPSO facilities and services providers. To date, it has six FPSO projects mobilised in Malaysia, Nigeria, Vietnam and Ghana.