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Update: Singapore's Ezra puts on hold US IPO plan for subsea unit
[SINGAPORE] Ezra Holdings Ltd, a Singapore-listed oilfield service company, said it has put on hold a plan to list its subsea services unit in the United States, prompted by unfavourable market conditions. "Given where the markets are, we have effectively put that on hold," Eugene Cheng, group chief financial officer of Ezra, told Reuters on Wednesday.
Cheng said comparable companies were trading in the US and Europe at three to four times earnings before interest, tax, depreciation and amortisation, down from seven to eight times when Ezra was first considering the option. He was referring to the drop in the companies' enterprise value-to-EBITDA ratios.
A more than 50 per cent decline in crude oil prices over the past half-year has prompted investors to sell shares of oil and gas companies. The FT ST Oil & Gas index, which tracks 17 Singapore-listed energy firms, has lost 29 per cent in the past six months.
Ezra announced about a year ago that it had appointed JP Morgan Chase & Co to advise on strategic options for its subsea services division, including a possible listing of the business in the United States.
Ezra said the subsea services division, which installs infrastructure on the bottom of ocean for oil and gas fields, contributed 70 per cent of revenue in the company's 2014 financial year.
Ezra's shares rose 0.9 per cent to S$0.54 on Thursday, outperforming a 0.1 per cent gain on the benchmark Straits Times Index. Shares of the oilfield service provider fell 60 per cent in 2014.