ENERGY infrastructure and technology group Yinson Holdings Bhd has distanced itself from its oil & gas (O&G) peer Serba Dinamik Holdings Bhd, following a damning blog which the former claimed to contain “factually wrong” allegations about the state of its financials.
Commenting on the blog by prolific i3Investor platform blogger calvintaneng entitled “After Serba, Yinson is Another Stock with Horrendous Borrowings and Very Small Dividend Yield” which first appeared on the popular i3Investor platform blogger on Saturday (June 5), Yinson said:
“We do not normally respond or clarify opinions of unidentified persons. However, in the light or recent developments in corporate Malaysia we felt this warranted a clarification.”
Among others, Yinson disputed claims by calvintaneng by clarifying that it is important to note that the company’s RM3.92 bil of debt “is non-recourse to Yinson, ie Yinson does not have a guarantee on the repayments of these loans” as highlighted in its annual report for the financial year ended January 2021”.
“The lenders of these projects would typically instead seek repayment solely on the cash flow of the projects or the parent company guarantee of (sic) or clients,” Yinson further pointed out.
To put things into perspective, calvintaneng has raised the following points in the introductory part of his blog:
- “After we saw the RM3.1 bil ticking time bomb of Serba, we discovered that Yinson has an even bigger time debt bomb at over RM5 bil”;
- “These are some red flags regarding Yinson just like those found in Serba”; and
- “Debt getting from bad to worst. Cash is depleting. Assets depreciating. Another stock with a ticking time debt bomb”.
“For simplicity, (Yinson’s) total order book remained at US$9.75 bil (RM40.26 bil) as of March 31, 2021 which is more than sufficient to repay debts (net debt RM4.1 bil), operation cost and pay dividends over time,” asserted Yinson.
Other allegations/matters that the company countered were pertaining to having to compete for low paying jobs; poor dividend payouts due to high debt level; and investment bank give “buy” calls due to “top holders of Yinson loaded with margin loans from investment banks with shares pledged to them as collateral for margin loans”, among others.
At the close of today’s trading, Yinson was up 10 sen or 2.04% at RM5.00 with 984,500 shares traded, thus valuing the company at RM5.5 bil. – June 9, 2021