IPO Public Investment sets Icon Offshore FV at RM2.01

by **Cals** Thu 05 Jun 2014, 03:14

IPO Public Investment sets Icon Offshore FV at RM2.01

Business & Markets 2014

Written by Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com

Wednesday, 04 June 2014 15:00

KUALA LUMPUR (June 4): Public Investment Bank Bhd has set a fair value of RM2.01 for soon-to-be-listed Icon Offshore Bhd, while maintaining a positive outlook on the oil and gas support-services provider.

In a note today, Public Investment said the positive outlook was based on Icon's plans to increase its marine vessels, besides the group's earnings visibility.

“The group’s growth will be buoyed by its fleet expansion plans and earnings visibility from orderbook of RM700m, which are largely long-term,” said Public Investment.

Icon, which is seeking a listing on Bursa Malaysia, plans to increase its fleet to 39 vessels by the first quarter of financial year ending December 31, 2016.

Public Investment said a 71.8% portion of Icon's orderbook was made up of firm contracts, while 28.2% had a chance for optional extension.

Out of Icon's total orderbook, 90% of contracts are long-term charters, which means earnings are secured, according to Public Investment.

“Long-term charters, moreover, are less susceptible to fluctuating or depressed charter rates,” said Public Investment.

According to Public Investment, Icon has high utilisation rates for its vessels. The three-year average utilisation stands at 86.5%.

To optimise its fleet, four of Icon's vessels have been identified for disposal.The sale proceeds will finance the acquisition of new vessels.

“We believe Icon's listing is timely considering the ongoing opportunities in Malaysia and the region,” said Public Investment.

Icon's IPO involves the sale of up to 510.8 million shares, of which, the offer for sale portion comprises up to 289 million existing shares. The public issue involves 221.7 million new units.

The indicative retail share price is RM1.85 each.