SINGAPORE (Bloomberg) - Mainboard-listed Ezion Holdings was sued by a partner which accused the Singapore-based offshore service provider of a conspiracy to induce an A.P. Moeller-Maersk A/S unit to breach charter agreements.
Ezion created the impression Atlantic Marine Services BV, which it had agreed to charter oil rigs with to Maersk Oil, was in financial trouble, the Amsterdam-based company claimed in a lawsuit filed last month in the Singapore High Court. A closed hearing is scheduled for June 2.
Atlantic Marine said in the suit it agreed to pay inflated charter rates to Ezion for the rig services provided to Maersk Oil to help the Singapore company secure bigger loans.
The claims are frivolous and without merit, Ezion's lawyer Peter Doraisamy said. Maersk Oil, which isn't a party in the lawsuit, said it has terminated its contract with Atlantic Marine for its failure to meet contractual obligations.
Muralli Rajaram, a lawyer representing Atlantic Marine, declined to comment.
Ezion's stock fell 5.1 per cent to $1.125 as of 1:45 p.m. local time, poised for the lowest close since April 10. The benchmark Straits Times Index declined 0.2 per cent.
Atlantic Marine's lawsuit "could potentially be viewed as an attempt to save its position as a Maersk Oil middleman," RHB analyst Lee Yue Jer said in a research note on Monday. "The market has taken a knee-jerk negative reaction." Mr Lee kept his buy rating and target price of $2.10.
Ezion, which last week posted a 9.4 per cent fall in first- quarter net income to US$41 million, described the operating environment as "challenging" after a drastic drop in oil prices.
The case is Atlantic Marine Services BV v Ezion Holdings Ltd., S401/2015. Singapore High Court.