EZION HOLDINGS LIMITED 
By EZION HOLDINGS LIMITED (Incorporated in the Republic of Singapore) (Company Registration No 199904364E)
ACQUISITION OF THE ENTIRE SHARE CAPITAL OF TERAS CONQUEST 4 PTE LTD 1. INTRODUCTION
The Board of Directors of Ezion Holdings Limited (the "Company", and together with its subsidiaries, the "Group") wishes to announce that the Company has on 2 January 2014 entered into a conditional letter agreement (the "Letter Agreement") with Venstar Investments Ltd, Venstar Investments II Ltd, Evia Growth Opportunities II Ltd and Skyven Growth Opportunities Fund Pte Ltd (collectively, the "Vendors"), for the sale and purchase of an aggregate of
1,100,000 shares (the "Sale Shares") in the issued share capital of Teras Conquest 4 Pte Ltd
(the "Target"), representing 100% of the issued and paid-up share capital of the Target for an aggregate consideration of US$32.5 million or equivalent to SG$41,211,057 (the "Transaction").
The Target is a Singapore-incorporated company, with its sole asset being a Multi-Purpose Self Propelled Jack-up Rig (the "Liftboat") with a six (6) year chartering contract to the Group which commenced in February 2012.
Upon completion of the Transaction, the Target shall become a wholly-owned subsidiary of the
Company.
Pursuant to the Letter Agreement, the Company shall acquire the Sale Shares from the Vendors. The Vendors hold the following number of Sale Shares:
Name of Shareholder | Number of Sale Shares |
Venstar Investments Ltd | 286,000 |
Venstar Investments II Ltd | 228,360 |
Evia Growth Opportunities II Ltd | 342,760 |
Skyven Growth Opportunities Fund Pte Ltd | 242,880 |
Total | 1,100,000 |
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The aggregate consideration of US$32.5 million (the "Consideration") was arrived at after arm's length negotiations, on a "willing buyer willing seller" basis taking into account, amongst other factors, the net tangible assets value and expected future income of the Target.
The Consideration is to be fully satisfied by way of the issuance of an aggregate of 18,392,046 shares in the capital of the Company (the "Shares") at an issue price of S$2.2407 per Share. The
18,392,046 Shares (the "Ezion Consideration Shares") will be issued to the Vendors in the following proportion:
Venstar Investments Ltd 4,781,932 0.4% Venstar Investments II Ltd 3,818,189 0.3% Evia Growth Opportunities II Ltd 5,730,961 0.5% SkyVen Growth Opportunities Fund Pte Ltd 4,060,964 0.3%
Total 18,392,046 1.5%
The issue price of S$2.2407 represents a 1.0% discount to the volume-weighted average share price of S$2.2622 on 2 January 2014, being the full market day on which the Letter Agreement is signed.
The Ezion Consideration Shares, when issued, shall rank pari passu with the then existing issued ordinary shares of the Company, save that they shall not rank for any dividends, rights, allotments, distributions or entitlements, the record date of which falls on or prior to the date of allotment of the Ezion Consideration Shares. Following the issue of the Ezion Consideration Shares, the total number of issued shares in the capital of the Company will be increased from 1,185,399,936 to
1,203,791,982. The Ezion Consideration Shares will represent approximately 1.5% of the
enlarged number of issued and paid up shares in the capital of the Company.
Completion of the Transaction is conditional upon, inter alia, the following:
(i) signing of the definitive sale and purchase agreement and other ancillary agreements, each of which will contain no additional material terms not set out in the Letter Agreement (save for the customary representations and warranties);
(ii) the receipt of the approval in-principle for the admission to and listing and quotation of the
Ezion Consideration Shares on the Mainboard of the SGX-ST;
(iii) notification to the mortgagee, OCBC, and the receipt of acknowledgment of no objection to the Transaction from OCBC;
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(iv) satisfactory completion of business, legal and financial due diligence to the Company's satisfaction; and
(v) no material adverse change to the financial conditions or operations of the Target since the date of its last audited accounts.
The Transaction will allow Ezion to re-flag the Liftboat and better position itself for subsequent renewal of the charter contract.
5. FINANCING AND FINANCIAL EFFECTS OF THE TRANSACTION
The pro forma financial effects of the Transaction on the Company set out below, based on (i) the audited consolidated financial statements of the Group for the financial year ended 31 December
2012 ("FY2012"); and (ii) the announced unaudited financial information of the Group for the nine-
month period ended 30 September 2013 ("3Q2013"), are strictly for illustration purposes only
and do not reflect the actual financial position of the Company after completion of the Transaction.
The effects of the Transaction on the consolidated net tangible assets ("NTA") per Share of the Company for FY2012, assuming that the Transaction had been effected at the end of FY2012 and 3Q2013 respectively, are summarised below:
NTA as at 31 December 2012 Before the Transaction After the Transaction
Consolidated NTA attributable to the shareholders of the Company (US$'000) Number of Shares (excluding treasury shares) ('000)
Consolidated NTA per Share attributable to
the shareholders of the Company (US cents)
552,849 585,349
909,891 928,283
60.76 63.06
Consolidated NTA attributable to the shareholders of the Company (US$'000) Number of Shares (excluding treasury shares) ('000)
Consolidated NTA per Share attributable to the shareholders of the Company (US cents)
762,491 794,991
963,197 981,589
79.16 80.99
The effects of the Transaction on the consolidated earnings per Share of the Company ("EPS") for FY2012, assuming that the Transaction had been effected at the beginning of FY2012 and 3Q2013 respectively, are summarised below:
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Consolidated profit after taxation and minority interests (US$'000)
Weighted average number of Shares
(excluding treasury shares) ('000)
78,841 83,688
826,398 844,790
Consolidated EPS (US cents) 9.54 9.91
Consolidated profit after taxation and minority interests (US$'000)
Weighted average number of Shares
(excluding treasury shares) ('000)
120,592 125,439
948,300 966,692
Consolidated EPS (US cents) 12.72 12.98
In compliance with Rule 1009 of the SGX-ST Listing Manual ("Listing Manual"), the relative figures computed on the bases pursuant to Rules 1006 (a) to (d) of the Listing Manual in relation to the Transaction are as follows:
(a) Net asset value of the assets to be disposed of, compared with the Group's net asset value.
(b) Net profits(2) of US$4,847,000 attributable to the Sale Shares, compared with the Group's net profits(2) of US$122,518,000, for the nine (9) months period ended 30
September 2013.
Not Applicable(1)
4.0%
(c) Aggregate consideration of US$32.5 million compared with the Company's market capitalization(3) based on the total number of issued Shares excluding treasury shares as at 2
January 2014, being the last market day preceding the date of the Letter Agreement.
1.5%
(d) Number of equity securities issued by the Company as consideration for the Transaction (being 18,392,046 Ezion Consideration Shares), compared with the number of equity securities previously in issue of 1,185,399,936 Shares.
1.6%
(1) This is not applicable to an acquisition of assets.
(2) "Net profits" means profit or loss before income tax, minority interests and extraordinary items.
(3) "Market capitalization" is determined by multiplying the number of Shares in issue by the weighted average price of such Shares transacted on 2 January 2014 (being the last market day preceding the date of the Letter Agreement).
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As none of the relative figures under Rule 1006 of the Listing Manual exceeds 5%, the Transaction is classified as a non-discloseable transaction. However, as the Transaction is to be satisfied by the issuance of the Ezion Consideration Shares, this announcement is made pursuant to Rule 1009 of the Listing Manual.
Save for their respective shareholdings in the Company, none of the Directors or controlling shareholders of the Company has any interest, direct or indirect, in the aforesaid transactions. The Directors are also not aware of any substantial shareholders of the Company who have any interest, direct or indirect (other than their shareholdings in the Company), in the aforesaid transactions.
8. DOCUMENTS AVAILABLE FOR INSPECTION
A copy of the Letter Agreement is available for inspection during normal business hours at the Company's registered office at 15 Hoe Chiang Road, #12-05 Tower Fifteen, Singapore 089316, for a period of three (3) months from the date of this announcement.
BY ORDER OF THE BOARD Lim Ka Bee
Company Secretary
2 January 2014
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