Sold 1,000 EZRA
The share price of EZRA has weakened for the past week since it announced the S$162.4 Million Order for a Multi-Functional Support Vessel. I feel that it is not wise to go against the general downtrend at the moment so decided to lock in the small profit.
The immediate concerns for investors would be how the Company fund this sophisticated equipment. It could use the proceeds from the partial disposal of EOC, alternatively, it could raise fund by share placement and lastly combining internal funds plus borrowings.
In any case, the market does not seem to appreciate this latest move. The huge capital outlay would leave shareholders who are expecting some kind of cash distribution from EOC listing disappointed. To do share placement would dilute the earnings further. Lastly the borrowings would increase the gearing of the Company and investors would need to price in some credit risk premium.
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