10 May 2014

Ezion MTN program increased to $1.5B

Ezion announced that it has increased the medium term note program which may consists of the term notes / perpeptual / convertibles to $1.5B from $0.5B currently. 

To me this is a good sign as it boost up confidence level as DBS (sole agent) to provide more liquidity to the company to grow the business in long run. Simply to say, Ezion could be in second stage of growth where it could leverage on the additional capital to clinch larger deals which could bring in higher profit margin.

Recent news besides this was that Ezion additional equity raising @ US$155M, which could simply translated to additional US$500M worth of projects (if equity:debt financing ratio still at 30:70 level). 

According to several analyst reports, some of the rig projects were facing delayed issue and it may dampen the demand from both buyers & investors.

Nonetheless, as long as the long term ROE stands at 20% and above, I would consider it as one of my long term investing counters, until any structural changes in fundamental of the co. 




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