Ezion / Triyards

Ezion / Triyards: Ezion entered into a subscription agreement for 29.5m Triyards warrants, on condition it directs at least US$150m of newbuild contracts to Ezion within the next 120 days. This indicates that Ezion is confident of securing at least three new service rig contracts during this period, assuming each rig costs US$60m, and should assuage investor concerns that lower oil px may affect future contract flows. Meanwhile, this strategic move helps Ezion manage its rig delivery schedule, and should avoid future rig delay opportunity costs. The warrants have an exercise price of US$0.563 per share, and have a three year life. The US$16.6m exercise quantum represents 8.3% of Triyards' enlarged share capital. DMG reiterates Ezion as one of its Top Picks for its 35% / 56% growth with strong contract coverage over the next three years. Maintains Buy with TP $2.65, based on 12x blended FY14e/15e P/E