Ezra Holdings has proposed a renounceable rights issue of up to 2.0b new shares at an issue price at a discount of not more than 50% to the theoretical ex-rights price for each rights share, on the basis of up to 200 rights shares for every 100 existing ordinary shares, as at a date and time to be determined by the directors of the company.

Ezra has also proposed an issue of fixed rate convertible bonds due 2020 with an aggregate principal amount of up to S$200m, convertible into new shares at a conversion price to be determined. An EGM will be convened to seek shareholders’ approval for both the rights issue and bonds issue. Total estimated net proceeds is about US$289.5m, and the bulk of it will be used to repay S$225m of fixed rate notes due in Sep this year. We maintain our HOLD rating on the stock, but put our fair value estimate of S$0.47 under review.

Source: OCBC Research - 2 Jun 2015