Ezra

Ezra’s shareholders will receive 1 Triyards share for every 10 ofEzra’s. The listing of Triyards is part of Ezra’s plan to realign itsbusiness towards greater focus on its subsea and offshore division. Ezra will retain amajority control of 67% in Triyardspost distribution. CIMB neutral on the transaction as Triyards only contributes 3-4% of Ezra’s earnings. Triyards’ order book is about US$150m-200m p.a., comprising fabrication of liftboats, self-elevating platforms and topsides and internal shipbuilding/repair works for Ezra. Add that the listing of Triyards is unexpected but it raises the prospect of fund-raising at a later stage. There are pockets of growth opportunities, especially in Brazil where fabrication capacity is in demand. However, this may require capital injection, which Ezra may not be able to fund given its own stretched balance sheet. The dividend in specie distribution route is the best option given the choppy equity market, speeding up the process of listing as it meets SGX's rule of having minimum 500 shareholders. Finally, the dividend in specie of Triyards shares could be the only dividend that Ezra shareholders would receive for FY12 as there may not be further distribution from the Ezra group. House maintains O/p on Ezra with $1.38 TP.