Sembcorp Marine Rides On Subsea Demand
Sembcorp Marine’s subsidiary, Jurong Shipyard, has clinched a new contract worth US$385.5 million ($484.5 million) from Helix Energy Solutions. The contract entails the construction of a semi-submersible well intervention rig which will be scheduled for delivery in January 2015. The rig will feature latest technology to be an efficient purpose designed platform with capabilities to perform a wide range of tasks. It is also Jurong Shipyard’s first specialized platform with well intervention and subsea capabilities, thus representing a significant step in the firm’s bid to grow in this market segment. The rig will have the ability to operate in deepwater operations worldwide, including the Gulf of Mexico, offshore Brazil and West of Africa. The project is expected to yield dividends for the firm in FY13 and beyond.
Significance: The contract win is testament of Jurong Shipyard’s rig construction capabilities and versatility in developing purpose-designed solutions for the offshore industry. This could help further boost its order books as it looks forward to a good FY12.
Oceanus Announces Placement Amidst Restructuring
Beleaguered Oceanus Group has announced that in connection with its corporate restructuring exercise, it intends to issue approximately 278 million new shares at $0.072 apiece. The issue price represents approximately 9 percent discount over the volume weight average price of $0.079 on 12 March 2012. Oceanus intends to raise proceeds of around $20 million which it will use to satisfy its general corporate and working capital requirements. A total of 19 individual/corporate investors have been identified and will be subscribing to the proposed placement exercise, with Assetraise Consultants taking the bulk of the placement shares through a $7.9 million investment. The placement shares will hold approximately 12 percent of the enlarged issued share capital of the company.
Significance: The placement exercise comes at an arduous time for Oceanus as it has had to contend with deep losses and the possibility of further losses in FY12. 4Q11 losses stood at Rmb502.6 million ($99.9 million).
Ezra’s Shares Corrects On Share Placement
Just days after announcing that it sold down its stake in Ezion Holdings, Ezra Holdings, released press statements on 9 March 2012 that it had successfully placed 110 million new shares at $1.10 each. The successful placement of shares raised about $121 million in gross proceeds in which the company intends to bolster its balance sheet as it continues to execute its growing order backlog. However, investors did not take too kindly to this placement as shares plunged $0.09 or 7.4 percent after the announcement was made. In a sharp knee-jerk reaction, observers noted that the placement plan would be dilutive to existing shareholders by 11 percent. However, analysts were quick to point out that this placement also comes with the promise of new contracts to come. CIMB said that the proceeds of the placement are intended for use as working capital as Ezra executes its US$1 billion subsea order backlog. The research house expects to hear more contract wins in the next two months as Ezra’s tender book remains strong.
Significance: Ezra is seen to be accumulating a large cash hoard as it anticipates demand from subsea contractors to balloon in the face of full schedules for the next two to three years. The funds that it has raised will help strengthen Ezra’s position to seize the opportunities its sees in the offshore oil and gas industry.