Home Investment IPO Snapshot STX OSV - Unattractive Offshore Play

STX OSV - Unattractive Offshore Play

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STX OSV is a Norway-based shipbuilder for the offshore industry with yards in Norway, Romania, Brazil and Vietnam. In 100 words or less, buy, stag or avoid?

Upsides

  • STX OSV is in the buoyant offshore industry supporting oil and gas exploration
  • One of the market leaders in large AHTS and offshore support vessels
  • Almost S$4bil in order book

Downsides

  • Only returned to profit in 2009
  • Liabilities at 8 times equity as of Jun 2010
  • Uncompetitive cost base versus peers in Asia
  • Book-building exercise poorly received, with offer price at bottom end of S$0.79 to $1.13 range
  • Large number of vendor shares offered in the IPO

Similar to

  • Jaya Holdings
  • Otto Marine

Conclusion

  • Avoid

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