Singapore-listed offshore services provider Ezra Holding has obtained approval from its shareholders to authorise convertible bonds and rights issues.
The company is expected to raise approximately USD150 million from the rights issue and another USD150 million from the convertible bonds issue.
The gross proceeds from both issues will be primarily used to repay Ezra’s SGD225 million (USD168 million) fixed-rate notes and SGD150 million perpetual securities, both due in September.
“With the rights issue, we will strengthen our balance sheet and reduce our gearing significantly. Also, the group is focused on pursuing other primary alternatives of capital raising initiatives, including the sale and leaseback of key assets,” said Ezra chief financial officer Eugene Cheng in a filing to the Singapore Exchange.
The repayments will help deleverage Ezra’s balance sheet and save approximately USD9 million in interest annually.
“The option for a convertible bonds issue provides an added alternative,” added Cheng.
Ezra intends to redeem its bonds due in September 2015 and will call the perpetual securities through its capital raising efforts to address any refinancing concerns in the market.
In the meantime, Ezra is also working closely with banks for additional financing lines, as well as pursuing other capital raising initiatives.