Fred Olsen Energy (Sell, TP: NOK3.00) - Clock is ticking
With waivers until end-Q2 2018, Fred Olsen Energy is approaching its restructuring due date. We believe the combination of an old fleet with limited backlog and lack of cash-flow, even to pay interest, could result in a restructuring where the current equity is marginalised. Our NAV is negative and our asset-based peer group valuation also yields virtually no equity value. Hence, we maintain SELL and a target price of NOK3.Fred Olsen Energy is engaged in offshore drilling as well as engineering and fabrication services. Co. provides services and operates within the two segments; offshore drilling and engineering and fabrication. The Offshore Drilling segment provides services to the offshore oil and gas industry. The Engineering and Fabrication segment provides engineering, fabrication, ship building and repair services for various offshore and onshore industries.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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