Nam Cheong

Nam Cheong: Grp has announced a placement of 190m shares (comprising 140m shares borrowed from the Lenders and an additional 50m shares borrowed upon the exercise of the additional share borrow option), which could raise approx. $47m for the grp. Placement represents 9.93% of the existing share capital of the Co. CLSA is acting as the placement agent. The Placement Shares will be placed out at a price of $0.255 / Share and represents a discount of approximately 9.70 % to the weighted average price of $0.2824 for 10 Jan13. Grp intends to utilize the proceeds towards financing expenditure for shipbuilding and vessel chartering projects, together with refinancing existing borrowings and general working capital. We note that if the placement is successful, the new weighted average price, based on yesterday’s VWap would be approx. $0.280 & Grps NTA will increase from RM0.248 to RM 0.281. We note that placement comes as no surprise, with its stellar record orderwins last yr, backed by a buoyant outlook for the OSV segment going into 2013, investors have been tipping the grp to tap the capital markets.