Ezion Holdings Ltd will be raising net proceeds of some $18.9 million to pursue growth by issuing new shares to a unit of Singapore's Economic Development Board (EDB). The offshore oil and gas player jumped 3.3 per cent on the stock market yesterday to close at a 52'week high of $1.555 following the
news.

In filings to Singapore Exchange (SGX), Ezion said that EDB Investments Pte Ltd (EDBI) will subscribe for about 14.3 million new ordinary shares in the company at $1.3315 apiece, investing around $19 million in all.

The issue price carries a 10 per cent discount to the volume'weighted average price (VWAP) of $1.4794 for trades in Ezion shares on SGX last Friday. The new subscription shares represent about 1.61 per cent of Ezion's existing share capital. With the "strategic relationship", Ezion will be able to tap EDBI's resources and experience to expand its business in the offshore oil and gas industry, said Ezion group CEO Chew Thiam Keng. "The proceeds received from this investment will allow us to better position ourselves to meet the strong demand of clients for our product and services."

Of the net proceeds of $18.9 million, Ezion plans to use 70'90 per cent to acquire offshore and marine (O&M) assets and set aside 10' 30 per cent as general working capital.

EDBI is banking on Ezion's prospects.

"We believe that Ezion's differentiating capabilities and global market focus will further enhance Singapore's competitiveness and leadership in the marine and offshore industry, which is a significant contributor to Singapore's economy," said EDBI CEO Chu Swee Yeok.

Source: AmFraser