KUALA LUMPUR: Yinson Holdings Bhd
may be close to securing a Marlim FPSO contract while it remains in close competition for its other bids in Brazil and Ghana.
Kenanga research said in a note that Yinson's management expects an official announcement on the Marlim FPSO contract in three to six months.
"We returned from the briefing sensing stronger confidence from management on the potential new contract wins overseas to materialise, particularly for its bids Brazil.
"In fact, the company had been ramping up its investments in personnel and expertise in the Brazil for advanced preparation of any new contract wins to come from the country," it said.
The research house believes Yinson has the capacity to take on two additional contracts from a financial and operational standpoint, with stakes off about 70-80%.
Sumitumo will take on at least a 20% stake in a Marlim FPSO contract if it is secured.
Kenanga expects a similar equity holding structure may be in place for other future wins.
A third contract win may result in an equity-raising exercise of about RM500mil.
"Nonetheless, we believe this should not lead to too much of an overhang seeing that it is growth-driven (as opposed to borrowings repayment) and at a very palatable size.
"Capex per new project is estimated at around USD1b, with a funding structure of roughly 75% debt and 25% equity," said Kenanga.
THe research house maintaines its outperform recommendation on Yinson with a higher target price of RM7.75 from RM6.10 previously.
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