Interest in Icon Offshore falls on designation

The share price of the OSV provider fell 34% or 27.5 sen to close at 54 sen yesterday


TRADING interest in Icon Offshore Bhd’s shares fell sharply after the market regulator moved to designate the counter last Friday due to excessive speculative activity.

The share price of the offshore support vessel (OSV) provider fell 34% or 27.5 sen to close at 54 sen yesterday, valuing the company at RM1.28 billion.

Trading volume was 93% below the 20-day average with a total of 437,000 shares worth RM247,577 exchanging hands.

Last Friday, Bursa Malaysia Securities Bhd declared Icon Offshore as a designated counter as excessive speculation drove the counter’s shares on a rally.

The stock was up 345% in the past five days and rose 212% in the past 30 days.

The imposition of the ruling for the company’s shares and its ordinary rights with warrants (Icon-OR) will be imposed until further notice.

“The decision to designate the securities of Icon and Icon-OR is due to excessive speculation observed in the trading of the securities and has been taken in the interest of ensuring a fair and orderly market,” Bursa said in a statement last week.

The accord of designated counters means trading of the OSV provider’s securities will now require upfront payment before buying orders are allowed and a free balance of securities before selling.

The company’s shares rallied following a share consolidation and rights share issue going ex last week.

In a separate filing, Icon Offshore said Urusharta Jamaah Sdn Bhd has ceased to be a substantial shareholder in the company, following the disposal of 972,225 shares in the company.

Urusharta Jamaah is a special-purpose vehicle set up by the government to manage Lembaga Tabung Haji’s underperforming assets.

According to the 2018 annual report, Urusharta Jamaah held an 8.8% stake in Icon Offshore as of March 29, 2019, and was the second-largest shareholder after Ekuiti Nasional Bhd’s (Ekuinas) vehicle, Hallmark Odyssey Sdn Bhd, which controls a 42.28% stake.

Icon Offshore’s share consolidation saw its issued shares reduced by a factor of 50 to one, an issuance of rights on a 60-to-one basis with free warrants to raise a minimum of RM183 million and undertake a debt restructuring involving RM577.1 million with eight lenders, which will slash its borrowings by more than 36% to RM412.99 million.

At the same time, Icon Offshore’s gearing will improve from 9.16 times to 1.14 times.

Ekuinas has already committed to subscribing for the exercise for RM183 million.

The share consolidation and rights issue with warrants, according to Icon Offshore, will also strengthen its capital base.

Icon Offshore was formed in 2012 via the merger of Tanjung Kapal Services Sdn Bhd and OMNI Petromaritime Sdn Bhd. It was listed on Bursa Malaysia in June 2014 at an IPO price of RM1.85 per share, raising RM534.69 million.