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Hot stock: Shares of Ezra Holdings extend losses on Tuesday to record low since listing

33021290.3 (37063220) - 29_12_2015 - mtezra25.jpg

SHARES of offshore marine company Ezra Holdings extended their losses on Tuesday for a seventh trading session, slipping further to a record low on Tuesday morning.

At 10.18am, Ezra shares were down 6.4 per cent at 4.4 cents, the lowest price since its listing in August 2003. The counter topped the volumes chart with 22.19 million shares traded.

The failure of rival Swiber Holdings Ltd, which has filed for judicial management, has heightened concerns over the financial health of companies in the oil industry.

Ezra is reportedly seeking to raise US$100 million through a share sale and through the divestment of non-strategic assets, according to a report by UOB Kay Hian on Monday. The brokerage said that the turnaround by Swiber from liquidation to judicial management "only delays the inevitable cascade defaults within the sector".

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A prolonged longer oil price environment and recent spate of poor earnings from oil majors will prevent the much-needed rise in service price required for the sector to make a turnaround, UOB Kay Hian pointed out in a note.

Short interest as a percentage of Ezra's outstanding shares climbed to 8.3 per cent on July 28, from 5.8 per cent at the end of June and near the highest in a year, according to data from research firm IHS Markit.

Last month, Ezra Holdings had reported a wider Q3 net loss of US$242.87 million, from US$3.01 million a year ago, dragged down by lower revenue and a one-time non-cash loss of the sale of interests in its subsea unit.

Loss from its continuing operations from profit or loss contributions of its two subsidiaries, Emas Offshore Ltd and Triyards, deepened to US$235.06 million compared to US$3.36 million a year ago.

EMAS Chiyoda Subsea, a 50-50 joint venture between Ezra Holdings and Chiyoda Corporation, was part of a consortium that recently clinched a US$1.6 billion contract by Saudi Arabian oil giant Saudi Aramco. EMAS Chiyoda Subsea's scope takes up close to 40 per cent of the contract value.