Last Thursday, Ezra Holdings announced its plan to consolidate its offshore support services division, EMAS Marine, into its 45.7% owned, Norway-listed associated company EOC Limited. Upon this consolidation, EOC will become one of the largest offshore support operators in the Asia Pacific by asset value.

Ezra to create one of Asia Pac’s largest offshore services players
EOC Group will become one of the largest offshore support operators in the Asia Pacific by asset value, managing an offshore services platform comprising over US$1 billion in offshore support assets. According to Ezra’s SGX announcement, EOC will have a fleet of 50 offshore vessels that will be among the youngest and most powerful in the region.
 
Ezra believes that the consolidation move allows them “to capitalise on investors’ growing interest for exposure in the different segments of the offshore oil and gas sector, and at the same time, meet increasing demand for newer offshore support vessels (OSVs)”.
 
Under this proposed consolidation, Ezra will sell its EMAS Marine division to EOC for US$520mn, comprising US$150 million in cash and US$370 million by the issuance of approximately 280.1 million new EOC shares to Ezra based on the issue price of NOK 8.18 per new share.
 
Ezra currently owns 45.7% of EOC, according to Bloomberg data.

Ezra shares up 7.7% month-to-date
The last two weeks saw Ezra shares on a run, gaining 7.7% versus the STI’s +0.6% over the same period. It is currently trading at its highest price in 6 months, and went above the $1.20 mark last week for the first time since January 2014. On Friday, the stock finished just 1 tick ($0.005) below the $2 mark.

Source: Macquarie Research - 14 Jul 2014