Singapore-listed integrated offshore services provider Ezra Holdings has proposed renounceable underwritten rights issue and issue of convertible bonds to raise proceeds of up to USD300 million for refinancing.
It is part of the Ezra’s refinancing strategy to deleverage its balance sheet and position the company to tap on future growth opportunities. So far, Ezra has appointed Credit Suisse Singapore as its sole financial advisor, sole global co-ordinator, and lead manager of the rights issue and the sole book-runner of the convertible bonds issue. In the meantime, Credit Suisse Singapore and DBS Bank have also been appointed by Ezra as joint underwriters of the rights issue.
“The convertible bonds market is interesting to us, as it presents an opportunity to broaden our investor base, potentially reduce our debt financing costs and introduce more liquidity into our balance sheet,” said Eugene Cheng, Chief Financial Officer of Ezra.
Ezra is proposing a renounceable rights issue of up to 2,026,869,722 new ordinary shares in the capital of the company. It will be offered on the basis of up to 200 rights shares for every 100 existing ordinary shares held by eligible shareholders as at a book closure date to be announced in due course. Ezra is expected to raise approximately USD150 million from the rights issue, which will be primarily applied to the redemption of the SGD225 million (USD165.9 million) fixed rate notes.
“The rights and convertible bonds issue is part of our broader strategy to expand our capital and investor base, deleverage and secure the Group’s long-term growth prospects. We believe that with these initiatives in place, our balance sheet will be robust enough for the long-term growth ambitions of the Group,” explained Cheng.
Therefore, the repayment of the securities will reduce the company’s net gearing thereby strengthening its balance sheet and putting Ezra in good stead to tap future growth opportunities.