FPSO spin-off on the cards as Yinson looks abroad for listing options
Malaysia's Yinson Holdings is edging closer to a landmark decision to spin off its floating production division via a listing on an overseas stock exchange as a strategic review of its floating production, storage and offloading business segment moves toward its climax.
Yinson told investors back on 1 March that it was conducting a strategic review of its FPSO division in order to better unlock and maximise shareholder value.
The review has explored various options including an initial public offering or strategic partnership opportunities.
Multiple market sources said Yinson is now inclined toward separating the FPSO division and listing it on a different stock exchange, with the Oslo Stock Exchange a favoured avenue.
The company is also evaluating having major strategic investors in its FPSO business.
The rationale for listing in Oslo is the improved access to finance in an FPSO-friendly market, leading to the conclusion that this would also generate a better valuation than in Malaysia.
In addition, the company's FPSO division is already strongly influenced by Norwegians who came on board when Yinson acquired Fred Olsen Production in 2014.
Oslo is currently the headquarters for its global FPSO operations; Kuala Lumpur is the corporate headquarters and Singapore is the headquarters for projects.
The acquisition of Fred Olsen Production meant that Yinson inherited a strong and experienced team, and the company has since grown into a top-tier global FPSO provider, with six units in operation — two in Nigeria, one in Ghana, two in Vietnam, and one in Malaysia — and three large FPSOs under construction for the Brazil market.
Among the Norwegians with Yinson are two in the senior management team — Eirik Barclay and Rolf Marthin Normann.
Recent success in winning th Brazil contracts has, however, put Yinson under pressure to secure the significant funding requirements to build and deliver the FPSOs.
The company is currently on a fundraising drive, and is aiming to raise 1.2 billion ringgit ($273 million) in a renounceable rights issue with free detachable warrants.
More than half the proceeds will be dedicated to its new FPSOs. The three under-construction floaters for Brazil are the Anna Nery FPSO and the Maria Quiteria FPSO, both for Petrobras, and the Atlanta FPSO for Enauta.
Kuala Lumpur-based market sources said Yinson will have some issues to navigate to satisfy the Malaysian authorities in order to separate the FPSO business.
The same sources said if Yinson can satisfy these demands the likelihood of the spin-off occurring is high but still not guaranteed.
Yinson, however, was not willing to provide an update to Upstream about its plans.
If the separation goes through, and a listing in Oslo occurs, Yinson would expand its Oslo office and possibly shift some functions from Singapore, said market sources.
The company has traditionally used shipyards in Asia for its FPSO construction work, but is currently using Drydocks World in Dubai for FPSO Atlanta as it tests yard abilities in other regions closer to Europe.
Malaysian securities analysts said recently that Yinson has good growth prospects in FPSOs and renewable energy.
An analyst from RBH said Yinson is currently pursing six new FPSO projects including four in Angola and one in Suriname. The analyst said Yinson is comfortable about securing one new large and one new medium-size project.
Yinson is also making strides in the renewables energy play, which is already a separate business segment to its FPSO division.
An analyst with Kenanga Resarch said Yinson “continues to also be in the forefront of energy transition, with about 1.5 gigawatts of renewable energy projects currently in the development and consent stage, as it targets to achieve carbon neutrality by 2030”.
RBH said Yinson is targeting to secure a 3 GW pipeline of renewable energy projects by the end of 2022 and expand the operating portfolio by 5 GW to 10 GW by 2028.
In its recent full-year 2021 results, Yinson executive chairman Lim Han Weng, said the company's strong fundamentals, backed by a strong and experienced management team, had allowed it to remain resilient through the recent global turbulences.
"During this juncture, the group has been relentless in our sustainability pursuits while our divisions chalked up new projects, further stamping our position as a global energy infrastructure and technology provider," he stated.
Oil prices have been edging higher this week as improving demand signals highlight the lack of supply options in oil markets if there is a drastic contraction in Russian production, a likely outcome if the European Union bans Russian oil. With both US crude and gasoline inventories continuing their decline, whilst recent altercations between the United States and Iran have rendered any JCPOA breakthrough largely impossible, analysts are anticipating another surge towards the $130-140 per barrel range this summer.
rumors is in, Fast is involved in the funding part for LSSPV projects... (might be a JV with banks to fund them, or with some mega funds behind to support the EPCC / Concession Owner, funding size is around RM 800m)
Hearsay, Fast is involved in the funding of LSSPV projects... (Might be a joint venture with banks to fund them, or some big money behind them to help the EPCC / Concession Owner, funding size is around RM 800 million)
Imagine how much cashflow Fast will create each year based on the present valuation with a funding level of RM 800.0 million...
It is just an estimate. Currently, 60% of their profit comes from 1 FPSO, which is most probably FPSO JAK. The total value of all existing 6 FPSOs are about RM3.1B.
FPSO Marlim 2 will be ready in 2022 (2.6B) FPSO Enauta will be ready is 2023 (500m) FPSO PDB will be ready in 2024 (4B)
Total estimated value for the 3 FPSO is about RM7.2B. By 2025, the estimated total value will be approximately RM10B. A 3X from today's value. Naturally, profit will go up by 3X if everything goes according to plan.
Again, dont take what I wrote as investment advice. Do your own due diligence.
KUALA LUMPUR (June 9): Petroliam Nasional Bhd (Petronas) is allocating about RM60 billion for capital expenditure (capex) in financial year ending Dec 31, 2022 (FY22) compared with RM30.5 billion a year earlier as the Malaysian national oil company prepares for the resumption of business activities, which were earlier disrupted by Covid-19-driven movement restrictions, and as the group sets aside money for clean energy or non-hydrocarbon-related ventures. "This year, we expect to almost double that [capex] amount which is RM60 billion, because of catch-up and the return of [business] activities. This is also the time we have to make inroads in some material steps into the non-hydrocarbon side of things," Petronas chief financial officer Liza Mustapha said on Thursday (June 9) at the MIDF Conversations event, which was held virtually. MIDF group managing director Datuk Charon Mokhzani was the moderator for the event. Liza said that out of Petronas' planned RM60 billion capex allocation for FY22, about RM40 billion has been earmarked for the oil and gas business besides non-hydrocarbon–related operations while the balance of the capex allocation has been earmarked to finance Petronas Chemicals Group Bhd's (PetChem) wholly-owned subsidiary Petronas Chemicals International B.V. (PCIBV) proposed acquisition of the entire stake in Sweden-based specialty chemicals group Perstorp Holding AB for €1.54 billion (about RM7.02 billion) from Financiere Foret S.A.R.L. Petronas owns a 64.35% stake in PetChem, according to PetChem's latest annual report. Looking ahead, Liza said non-hydrocarbon-related income is expected to account for about 30% of Petronas' revenue. "[About] 30% of our revenue should be coming from something which is not related to hydrocarbons. "We have to factor in [business] growth, otherwise, we will not be able to manage the energy transition and we will miss our target of achieving [net] zero [carbon] emissions by 2050," she said. According to her, about 10% of Petronas' RM60 billion capex allocation for FY22 will be earmarked for non-traditional businesses such as specialty chemicals and solar energy. "Previously, I think there was never a plan on what rate it should be [for the clean energy segment] because there was no allocation from the top. So, it didn't really take off. "So, we need to rethink our decision on the capital allocation [for the clean energy segment] and put it aside, because if we leave it at that and let them go with the flow, we are going to be a year behind the target again," she said. Petronas' financials improved in 1QFY22. In a statement on May 31, 2022, Petronas said profit after tax rose to RM23.44 billion in 1QFY22 from RM9.22 billion a year earlier while revenue climbed to RM78.75 billion from RM52.55 billion. "Despite favourable [first quarter] performance, the high oil and gas prices are expected to remain vulnerable with increased volatility due to geopolitical and macro-economic uncertainties. "Petronas will continue to strengthen our operational excellence to maximise value creation whilst intensifying our growth and sustainability agenda in Malaysia and internationally,” the company said.
In a bull market, anybody with a finger can press the green button and make money. "Analyst" and "Gurus" get to get away even if they are wrong because the trend is on their side.
Bursa Techs Index is currently bearish due to development in Wall Streets. When it comes to bear markets, investors can take comfort from history, which suggests that where there’s a beginning, there’s always an end.
The market now is good for those who want to grow their money, definitely not good for those who want to make money trading.
Those TP are for long term investors. Hence, speculators don't see value in the research as the TP won't be reflected in short term.
Mabel adventure in the EV Investment
Front End - Dnex OSAT - MPI and Inari Charging Infra - Tenaga and Yinson ATE Automation Specialist - Greatech, Vitrox and PentaMaster
Double-digit growth continues unabated & stronger - The tenth consecutive month of double-digit export growth in May 2022 reflect continued double-digit growth in manufacturing exports (May 2022: +27.3% YoY; Apr 2022: +17.3% YoY), agriculture exports (May 2022: +43.9% YoY; Apr 2022: +29.8% YoY) and mining exports (May 2022: +54.9% YoY; Apr 2022: +64.5% YoY). Now you know why Techs Digital Economy is very important in Mabel's Value Investing Portfolio. Beside some of the above companies has multi business like Dnex..
Flytothemoon is right, share price do tell the real story, i do own yinson and i dont think we should tell people to keep quiet. The worse thing a person can do is to live in their own bubble not knowing what is the truth, like glove supporters in TG telegram group, only listen to one side and dont know what is the truth, those that spoke the truth in the group and immediately kicked out. I3 here got no admin that ban people from saying negative things, so you need to filter out what is good and bad.
Yinson problem is their debt, perpetual debt. If they can reduce their debt, then one day it will fly, i dont understand why they kept on doing share buyback when the money can be used to just clear some of their debt. Well, am not the ceo, since his entire family bought billions of the rights issue, and have skin in the game, they know what is best for the company.
I think the gains are in ringgits, as in paper profit, unless they plan to bring all of their money back to Malaysia, which I doubt they want to since some of their debts are in USD, therefore if they bring back and ringgit weakens due to fed raising rates, then it is double whammy.
yea, thanks danny . noob2021 you are no manner but i still respect your feedom of barking, so please mutual respect , thanks. can you guys imagine if yinson no share buy back that huge amount, what would the price now? why ppl keep selling if this is so precious?
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....