Ezra: Daiwa notes that the group has proposed to issue renounceable rights of up to 2.03bn new ordinary shares in the capital of Ezra (200 rights shares for every 100 existing ordinary shares). It is also looking to issue fixed-rate convertible bonds, due 2020, at an aggregate amount of up to SGD200m. The total proceeds from this exercise should amount to USD300m. The proceeds will be used to repay SGD225m Fixed Rate Notes die Sep 2015 and SGD150m perpetual securities, callable also in Sep 2015.
The house cautioned on Ezra’s high net debt/equity ratio of 1.15x, as at 28 Feb and sizable debt due in Sep, along with its limited internal resources for repayment. The house reiterated their UNDERPERFORM rating and lower TP from $0.40 to $0.35.
Also, OCBC has downgraded their rating to SELL on valuation grounds with a lower fair value estimate of $0.26, down from $0.47.
On the other hand, UOB Kay Hian has given a HOLD rating (TP: $0.54)
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