SINGAPORE (June 30): Ezion Holdings has proposed an underwritten rights issue to raise net proceeds of up to S$137.5 million.

The group will issue up to 487.3 million new rights shares, at an issue price of 29 cents each, on the basis of three rights shares for every 10 existing ordinary shares.

DBS bank has been appointed the lead manager for the rights issue, and one of the joint underwriters together with United Chew Thiam Keng (the Chief Executive Officer, Executive Director and

Ezion says the proceeds from the rights issue will enable the company to fit out and re-purpose its fleet, acquire offshore and marine assets that are complementary, and allow flexibility to cater to different contracts. The funds raised would also help preserve the company’s committed credits while being able to respond to business and market opportunities for its fleet whenever they arise.

70% of the proceeds are expected to be used for the potential acquisition of new offshore and marine assets, and potential upgrading and modification of existing offshore and marine assets. The remaining 30% will be used for general working capital.

Chew Thiam Keng, Ezion’s CEO and substantial shareholder, together with his spouse Chan Fooi Peng have jointly provided an irrevocable undertaking to subscribe and pay for 43.3 million rights shares entitlements and excess rights shares that have a total value of up to S$50 million, or 35.38% of the total rights shares to be issued.

In a separate SGX filing, the group said it had on Tuesday entered into a partnership with Sinotrans & CSC Holdings Co, to establish a joint venture company Sinomarine & Teras Tianjin Offshore Co. The JVCo will operate service rigs in the offshore windfarm market in China.

On the same day, Sinomarine & Teras had also signed a cooperation agreement with China Huadian Corporation, a state-owned national power producer, to support offshore wind power installation projects in China. It expects to operate two service rigs for an offshore windfarm installation project by end-2016.

Ezion’s shares closed unchanged at 52 cents on Thursday.