Yinson still awaiting lenders' nod to buy Ezion

Yinson

KUALA LUMPUR: Floating, production, storage and offloading (FPSO) service provider, Yinson Holdings Bhd, is still awaiting the approval of lenders for the acquisition of loss-making Ezion Holdings Ltd of Singapore, with a due diligence process ongoing.

Yinson’s group chief executive officer Lim Chern Yuan, however, could not provide a deadline of the acquisition.

"When we signed the deal, which is something we wanted to go through, the targeted deadline was unfortunately, not within our control.

"While waiting for all approvals, what we can do is, continue our due diligence process,” he told a press conference after the company’s annual general meeting here, on Thursday.

Yinson said in a filing with Bursa Malaysia in April this year that its wholly-owned unit, Yinson Eden Pte Ltd, had signed a conditional debt conversion agreement and conditional option agreement with Ezion to acquire a 70 per cent stake by striking a deal with its lenders.

According to the filing, Yinson was discussing with the lenders to acquire up to US$916 million (RM3.74 billion) of Ezion’s existing loans through a debts assignment, with Yinson Eden paying the lenders US$200 million (RM816 million) in cash and Ezion shares.

Singapore-based The Business Times reported earlier that the deal took place just over a year after Ezion landed a US$2 billion refinancing package from six secured lenders, namely DBS Bank, OCBC Bank, United Overseas Bank, MayBank, CIMB and Caterpillar Financial.

On the conversion of two vessels into FPSO Helang and Abigail-Joseph FPSO respectively, Lim said the former was currently in the commissioning phase, and expected to sail away from China to Miri, Malaysia, within the next two months.

"We are optimistic of seeing revenue contribution from Helang towards year-end,” he added.

On FPSO Abigail-Joseph, he said it would  be upgraded soon for Nigeria’s First Exploration & Petroleum Development Company Ltd projects, and expects revenue contribution to start in the first to second quarter next year.

Based on Yinson’s annual report 2019, FPSO Helang would be redeployed under a bareboat charter of an FPSO facility valued at about RM3.37 billion, and an operations and maintenance contract value of about RM2.35 billion.

The total maximum possible estimated aggregate value of the FPSO Abigail-Joseph contract is at about RM3.67 billion.

Lim said as of March 31, 2019, Yinson had a firm order book of US$4.88 billion, which would keep the group going up to 2037.

He remained optimistic on outlook for the company due to a significant decrease in the number of players in the sector, coupled with the current stability in crude oil prices.

Maybank Investment Bank Bhd Reseach said in a note in June this year that there are only about eight active and experienced FPSO operators left in the market currently.

Yinson is among the top three with strategic partnerships (with Mitsui, Mitsubishi and Sumitomo) and constantly participating in tenders. - Bernama