Neptune soars on conditional offer
UPDATE 2.10pm: Shares in struggling Neptune Marine Services jumped at the open after the company revealed late yesterday its board had rejected a takeover proposal, saying it came with too many strings attached.
Shares in the oil and gas contractor were up 0.9 cents, or 40.91 per cent, to 3.1 cents shortly before the close.
Reporting a $143 million annual loss yesterday after the ASX had closed, the WA offshore oil and gas services provider revealed it recently received a highly conditional, indicative offer to acquire the company via a scheme of arrangement.
Neptune said that board endorsement of the offer would also have required agreement to a suite of lock-up provisions, suggesting the board could not have considered approaches by other suitors.
It did not identify the potential buyer or reveal any details of the takeover proposal.
"It was so heavily conditioned that I'm not sure the board was able to actually determine what the offer really was," chief executive Robin King said last night.
He suggested the approach was an endorsement of the company's restructuring strategy.
"It would appear that people are beginning to notice what we're achieving and any level of interest shows that perhaps we're on the right track," he said.
Under Mr King, Neptune has raised $65 million in fresh equity and undergone a major restructuring which has included cost cuts and the sale of vessels and some of its businesses.
At yesterday's closing price of 2.2¢ a share, the company was capitalised at just $38.6 million. It had no bank term debt as of June 30 and $11 million in cash.
Singapore engineering company MTQ Corporation holds a 15 per cent stake in Neptune acquired during its March rights issue.
The annual results included $123 million in previously flagged asset and goodwill write-downs, capital raising expenses and restructuring charges.
Despite the hefty loss, Mr King said there were encouraging signs in the second half that the restructuring had improved operating performance.
While revenue was evenly split between the two halves, Neptune reported earnings before interest and tax from continuing operations at $3 million in the second, compared with an EBIT loss of $2.9 million in the first.
Mr King said the company was also seeing the benefit of no longer operating ships by entering strategic relationships with vessel owners in Australia and Britain to bid for contracts.
"We're maintaining it's going to be a revenue outlook which will be lower as a result of losing (some) businesses but we still believe a much-improved profitability," Mr King said.
