norwegian bank acquires a stake in marine services provider ezra holdings 1446072015

Norway’s largest financial services group and bank, DNB ASA (STO:DNBO), has acquired a significant stake in Ezra Holdings Limited (SGX:5DN), the Singaporean offshore and marine services provider.

According to Deal Street Asia, the off market deal was put through by DNB Bankas, a DNB subsidiary, on September 25.

DNB Bank purchased 207 million shares of Ezra, or about 7.04 per cent, for SG$24.84 million, and has now become a substantial shareholder in the latter. DNB did not earlier own any shares in Ezra, which reported the transaction after the market closed on Monday.

Shares in Ezra Holdings Limited (SGX:5DN) closed at SG$0.121 on Tuesday, up 4.31 per cent, while DNB ASA (STO:DNBO) gained 2.07 per cent to NOK 108.30.

Shares in Singapore companies have lost over 21 per cent compared to their April high, while the Singapore dollar is down to six year lows – factors which combine to make acquisitions of Singapore companies increasingly attractive.

For the second quarter ended June 30, DNB Bankas reported a net profit of €6.7 million (SG$10.76 million), while parent DNB ASA earned a net profit of NOK 5.06 billion (SG$0.85 billion).

For the third quarter of FY 2015 ended May 31 Ezra reported a net loss of US$3 million (SG$4.28 million) as revenues slid 3 per cent to US$390.7 million. It said in its earnings announcement that it expected to face “strong headwinds” in the foreseeable future due to the adverse environment from low oil prices and did not declare a dividend.

Nevertheless, in June, Ezra announced its win of several global contracts worth over US$115 million in the aggregate. These included a pipeline in the North Sea, engineering and offshore support work in West Africa and the deployment of pipeline installation vessel Lewek Centurion in Asia.

In August, Ezra announced the sale of half of its subsea business to Japan’s CHIYODA CORPORATION (TYO:6366) for about SG$1.25 billion, including debt. The two companies formed a joint venture titled EMAS CHIYODA Subsea that would specialise in engineering, procurement, construction and installation (EPCI) contracts, and own its own fleet of construction vessels. “It will enable us to undertake large complex EPCI projects, as well as full field developments, which combine onshore and offshore facilities,” said Lionel Lee Chye Tek, group CEO and managing director of Ezra, referring to the JV.

According to Deal Street Asia, which quoted from Bloomberg data, Lionel Lee Chye Tek, has a 23.19 per cent stake in Ezra from 681.43 million shares, while Aker Global Employment Limited owns a 7.44 per cent stake and was the company’s second largest shareholder, according to Ezra’s annual report last year.

Ezra does not yet have information on who sold the shares to DNB Bank.