HLIB Research maintains Buy on Perisai Petroleum, target price RM1.55
Business & Markets 2012
Written by Janice Melissa Thean of theedgemalaysia.com
Thursday, 06 December 2012 15:25
KUALA LUMPUR (Dec 6): Hong Leong Investment Bank (HLIB) Research has maintained its Buy rating on Perisai Petroleum Bhd at an unchanged target price of RM1.55
In a note today, the research house said it was positive on Perisai’s proposed 10% placement and 50% sale of Enterprise 3 (E3) pipe laying barge, acquisition of the FPSO as well as its planned put call agreement with EOC Limited.
The call option, valid for two years, will give EOC the right to buy the remaining 50% stake in E3 for US$37 million, while Perisai has the right to put EOC to the same conditions.
“We are positive on the disposal which will lower debt as the jackup rig is scheduled for delivery in mid-2014 during a period whereby we believe would be a robust market for drilling,” HLIB said.
HLIB said that the rig and pipelay vessel could increase earnings several fold.
“The put call option will help to reduce cash outflow when the (80% payment of US$208 million) rig is delivered in mid-2014 ... Top line contribution from the rig is RM140 million while contribution from the pipelay barges is only RM67 million”.