SINGAPORE - Offshore and marine (O&M) group Ezion Holdings could raise up to S$50 million through a placement of shares and options to its first strategic investor in this prolonged industry downturn.
On Wednesday (April 4), Temasek-linked Pavilion Capital Fund Holdings (Pavilion) agreed to take a 4.43 per cent stake in Ezion by buying 96.2 million shares at 20.8 Singapore cents apiece, or S$20 million in total. Net proceeds from the share placement will be about S$19.6 million.
Pavilion will also receive, for a nominal sum of one dollar, 137.6 million options that may be converted into Ezion shares at 21.8 Singapore cents per Ezion share. If the options are fully exercised, Ezion will receive an additional S$30 million of gross proceeds, and Pavilion will hold a 10.13 per cent stake of Ezion's enlarged share capital. Net proceeds from the options, if fully exercised, will be about S$29.4 million.
Ezion shares are currently suspended.
The proposed investment in Ezion marks Pavilion's second foray into the O&M space in the current sector downturn. In February, Pavilion Capital Holdings, a related company, emerged as a new shareholder of Marco Polo Marine, although that interest was subsequently pared.
Ezion intends to draw between S$11.6 million and S$13.6 million of the net proceeds from the share placement for expansion of its business, including capital contributions or investments into joint ventures or partnerships.
Another S$6 million to S$6.1 million will go to repaying secured lenders for certain contributions towards corporate overheads and coupon payments for some S$115 million notes issued by Ezion.
A balance of up to S$1.9 million will be used to meet working capital requirements.
Proceeds from the options may go towards funding pursuit of new business opportunities including capital contributions or investments into joint ventures or partnerships with strategic partners.
Ezion recently emerged from a months-long debt refinancing exercise having secured support from stakeholders to convert debt to shares.