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Singapore “Flyer” of the Week: Mermaid Maritime

MermaidMaritime-LogoThis week’s “Flyer” of the week accolade goes to Mermaid Maritime (SGX: DU4). It is in no way related to the mythical mermaids featured in children’s fairy tale stories.

This “mermaid” is a provider of subsea and drilling services for the offshore oil and gas industry founded by Danish mariners in 1983. The stock price “grew” 17.2% so far, to close at $0.34.

On 30 September, the company announced that it “will be carrying out the Private Placement of up to 58,105,821 Placement Shares, being the remaining unsubscribed Excess Rights Shares, to institutional and other investors at the Placement Price, being an issue price of S$0.280 to raise gross proceeds of up to S$16,269,629.88.”

Mermaid completed a rights issue on 19 September and the unsubscribed excess rights shares are being placed with private investors as stated above.

The company is undertaking the exercise to “enhance the success of the Rights Issue by ensuring that the moneys raised through the Equity Fund Raising will now be maximized” and to further strengthen the company’s position.

Mermaid will be utilizing between 55% to 100% of the net proceeds from the equity fund raising to invest in assets such as drilling rigs and subsea vessels. The other 45% will be used for capital expenditures, paring down debt and other general corporate purposes, which includes funding its daily business operations (working capital).

The company is currently valued at a whopping 16o times earnings.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.  Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.