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PETALING JAYA: The new tender for the FPSO Parque das Baleias (PDB) letter in Brazil has put a key in the works for Yinson Holdings Bhd
, which expected to secure this tender, being the sole remaining bidder.
Following the announcement last week that the PDB letter is likely to open for new offers next month and the award likely in mid-2021, Yinson’s share price took a hit yesterday, closing at 11.23%. or 61 sin below RM4.82.
Yinson’s management declined to comment on the matter.
Although AmInvestment Bank and Maybank IB Research are negative about this development, both research houses considered that “not everything is bad”, given Yinson’s solid portfolio of other new projects and a good opportunity in the new tender, due to the works completed in engineering design and costing. process.
“As the FPSO’s Very Large Crude Carrier (VLCC) size has not changed, Yinson does not expect substantial reductions to the estimated US $ 1 trillion capex, which was already reduced in the previous offer during direct negotiations with Petrobras during the last months.
Citing economic difficulties due to the Covid-19 pandemic and the reduction in gas export curves involving the field, Petrobras canceled the initial tender for the FPSO PDB and authorized the start of a new tender process.
“It is likely that the bidding cost of less than US $ 10,000 will be capitalized for the new PDB bidding process. Therefore, the group is unlikely to incur an impairment provision for this development, ”AmInvestment Bank said.
Citing economic difficulties due to the Covid-19 pandemic and the reduction in gas export curves involving the field, Petrobras canceled the initial tender for the FPSO PDB and authorized the start of a new tender process.
The beginning of the PDB statutes will be rescheduled one year until the end of 2024.
Maybank IB Research viewed the new tender as a temporary setback, noting that without PDB, Yinson’s finances are healthier as the group has lower capex and does not require cash calls.
“We expect peer participation (of supply) to be restricted, given the limited capacity available and the more difficult financing problems to take on new jobs.
“The loss of this job will eliminate the need for a rights issue exercise, reduce foreclosure risk and reduce pressure on your balance sheet, intensify your energy transition plan and reward shareholders with a higher dividend per share payment. “Maybank IB Research said.
Meanwhile, CGS-CIMB said that Yinson’s current low share price provided investors with an opportunity to increase their holdings in the group as the management team would recoup through new FPSO offerings and renewable investments that is currently performing.
“We have followed Yinson long enough to know that management is capable of reinventing itself (buying Fred Olsen and pushing into the FPSO business), paying attention to maximizing shareholder value (difficult negotiations with banks to buy Ezion , strong drive to bid for very profitable FPSO contracts in 2018 to 2019), expects future developments (diversification towards renewable energies) and is able to move away from poor deals if conditions change (abandonment of Ezion deal) ”, said CGS-CIMB .
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