Ezra shares down on more debt woes

Ezra Holdings' Lewek Constellation vessel. Ezra said that Norway's Ocean Yield has announced serving a termination notice for the bareboat charter of a vessel with Emas Chiyoda
Ezra Holdings' Lewek Constellation vessel. Ezra said that Norway's Ocean Yield has announced serving a termination notice for the bareboat charter of a vessel with Emas ChiyodaSubsea. PHOTO: EZRA HOLDINGS

Winding up application filed against its JV unit; further delays in reporting results

Shares of troubled offshore services group Ezra Holdings tanked again yesterday on news of more debt woes over its ill-fated joint-venture firm, Emas Chiyoda Subsea.

It resumed trading yesterday after a one-day halt and sank 8.3 per cent or 0.2 cent to 2.2 cents. The group had halted trading on its stock on Tuesday just as it was due to release quarterly results.

The counter has now crashed 55.1 per cent so far this year.

Ezra, which is facing huge debts, announced late on Tuesday night that a Singapore-based firm, Necotrans Singapore, has filed a winding-up application against Emas-AMC, a wholly owned unit of Emas Chiyoda.

The group said it was notified of the winding-up application - filed with the Singapore High Court on Feb 6 - through a newspaper advertisement on Monday. The hearing has been fixed for March 3.

It said Emas-AMC is seeking advice on the winding-up application, as the group assesses the impact.

In its Singapore Exchange (SGX) filing late on Tuesday, Ezra also said Norway's Ocean Yield has announced that it had served a termination notice for the bareboat charter of a vessel with Emas Chiyoda.

It said Ocean Yield had said it will keep taking part in talks over the financial restructuring of Emas Chiyoda and is considering a short-term contract for the vessel to a related Ezra firm at a reduced rate as a long-term solution is discussed.

Ezra also said it has applied to the SGX for a further extension of 60 days to release financial results for its fiscal first quarter ended Nov 30 last year. The group was initially scheduled to announce results on Tuesday after having asked the SGX for a 30-day extension last month.

Ezra's latest trading halt was its second in two weeks.

On Feb 1, Ezra sought a trading halt before announcing it faces a "going concern" issue, given it may not be able to restructure its businesses and balance sheet in time.

The group had added it may have to take a US$170 million (S$242 million) write-down from its investments and loans to Emas Chiyoda, which also has unsettled charter defaults with trade creditors, for which Ezra is a guarantor.

An SGX spokesman said that companies may apply for further extensions for time if the circumstances warrant it, although they are not required to call for a trading halt when announcing an application to the SGX to extend the deadline for a results announcement.

"In Ezra's case, the halt came ahead of an announcement, including a disclosure on an application to wind up Emas-AMC," he told The Straits Times.

KGI Securities (Singapore) trading strategist Nicholas Teo noted Ezra shares have been in play ever since its Japanese joint-venture partners revealed writedowns amounting to 51 billion yen (S$634 million) tied to Emas Chiyoda last month.

But Ezra's efforts to buy itself time could be "disconcerting" for investors, said Mr Teo.

"Everybody knows they're in survival mode. Looking at the two possible outcomes that could emerge from this, the risk-reward trade-off is not worth it."

A version of this article appeared in the print edition of The Straits Times on February 16, 2017, with the headline 'Ezra shares down on more debt woes'. Print Edition | Subscribe