Singapore's ailing offshore and marine firm Ezion Holdings (EHL) has found a saviour in Malaysian-listed Yinson Holdings, the world's sixth largest floating, production, storage and offloading (FPSO) operator.
Yinson Eden Pte Ltd (YEPL) made the acquisition by entering into a conditional debt conversion agreement and conditional option agreement with EHL's lenders, according company sources.
The Malaysian floating production specialist said that YEPL is currently in discussion with the lenders to acquire up to $916 million of Ezion Holdings’ existing loans through debts assignment. The lenders will be paid $200 million cash and Ezion Holdings shares by YEPL.
YEPL also inked a conditional option agreement for the grant of 3.36 billion unlisted and freely transferable share options in Ezion. Each of the options carry the right to subscribe for one new ordinary share in Ezion at the exercise price 6.05 cents each. YEPL intends to retain the listing status of EHL.
Ezion said the deal will reduce its borrowings and debt service obligations and give it access to additional funds if Yinson exercises its options.
Upon completion of the debts conversion, YEPL will hold a minimum 70% stake in EHL’s enlarged share capital.
Moving forward, Yinson is optimistic about the turnaround of EHL’s business after the restructuring of bonds and debts.
Yinson chief executive officer Lim Chern Yuan said liftboats are preferable for maintaining oil production which provides synergistic value to the group’s principal activities of leasing, chartering and management of vessels for the oil and gas industry.