Ezion to take over joint ventures with Swissco unit, acquire related rigs and assets for US$61.9m

Ezion Holdings plans to take full control of two joint ventures with a unit of troubled Swissco Holdings for a combined S$5 million, and acquire related rigs and other assets for US$61.9 million (S$86.3 million).
Ezion Holdings plans to take full control of two joint ventures with a unit of troubled Swissco Holdings for a combined S$5 million, and acquire related rigs and other assets for US$61.9 million (S$86.3 million). PHOTO: EZION HOLDINGS

SINGAPORE - Ezion Holdings announced on Tuesday (March 28) that it plans to take full control of two joint ventures with a unit of troubled Swissco Holdings for a combined S$5 million, and acquire related rigs and other assets for US$61.9 million (S$86.3 million).

In a filing with the Singapore Exchange, Ezion said the moves were necessary to enable the continued operation of the JV companies and their engagement with existing customers as the firms were unable to meet their obligations.

Partner Swissco is currently under judicial management. It has been unable to repay notes worth S$100 million, while its debt restructuring plan was rejected by bondholders.

Ezion said Tuesday it plans to acquire the 50 per cent equity interest in Strategic Offshore Limited (SOL), an investment holding company incorporated in Malta, for S$3.5 million. SOL is a joint venture between Scott and English Energy Pte Ltd (S&E), a wholly-owned subsidiary of Swissco,and Ezion unit, Ezion Investments Pte Ltd.

Ezion also plans to buy the 50 per cent equity interest in Bahamas-incorporated Strategic Excellence Limited (SEL), another joint venture with the Swissco unit S&E, for S$1.5 million.

The company also plans to buy assets - including vessels, charter contracts, receivables and charter payment guarantees - from the units of SOL for a total of US$61.9 million, through three newly-set up units in Labuan, Malaysia.

Said Ezion: "After the acquisition, the group will be able to work closely with the existing customers of the JV companies to maximise the utilisation of the assets owned by the JV companies and improve the earnings of the group in the long term by, among other things, working towards cost-reduction through the realisation of economies of scale with the group's own fleet of assets."

The company said the transactions will be funded through bank loans and internal resources and are expected to have an impact on its earnings per share and net tangible assets per share for the financial year ending Dec 31, 2017.