Singapore energy services, bank stocks feel jitters from Ezra's bankruptcy filing

Ezra shares have been suspended from Monday since the offshore and marine group is no longer a going concern.
Ezra shares have been suspended from Monday since the offshore and marine group is no longer a going concern. PHOTO: ST FILE

SINGAPORE - News of Ezra Holding's bankruptcy filing sent some jitters through the Singapore stock market on Monday (March 20), with the FTSE ST Oil & Gas Index falling 0.9 per cent, while the benchmark The Straits Times Index was down about 0.5 per cent.

Ezra shares have been suspended from Monday since the offshore and marine group is no longer a going concern. Ezra filed for Chapter 11 bankruptcy protection in the United States on Saturday, claiming a New York address as its main place of business.

The most active among the oil and gas counters was shipbuilder Nam Cheong, which fell 1.4 cents or 28.57 per cent to 3.5 cents.

Late last Friday, Nam Cheong told the SGX that its independent auditors cast doubt on the group's ability to continue as a going concern. Analysts had previously flagged that Nam Cheong will have to restructure its S$90 million bonds before they mature on Aug 28.

Loyz Energy fell 0.2 cent or 8.3 per cent to 2.2 cents.

Meanwhile, Ezra's listed subsidiary Emas Offshore remains suspended.

Trading of its other subsidiary, yard-operating unit Triyards, was also halted from Monday.

Triyards has guaranteed part of a joint bank facility with Ezra, and could pay up to US$30 million if Ezra defaults, according to its annual report.

Banks stocks were also slightly down, although the fall of Ezra came as no surprise, with warning signs emerging as early as last year.

DBS fell 21 cents or 1.1 per cent to S$18.93. DBS Bank had unsecured claims of US$281 million (S$394 million) and secured claims of US$47 million on Ezra's holding company and two other units (Emas IT Solutions and Ezra Marine Services) which were part of the bankruptcy filing.

OCBC fell six cents or 0.62 per cent to S$9.60. OCBC Bank is owed unsecured claims of US$207 million and secured claims of US$73 million.

United Overseas Bank was down 21 cents or 0.96 per cent to S$21.74, although its exposure to Ezra is relatively small. UOB had only US$23 million in unsecured claims and US$10 million in secured claims.

The extent of each bank's exposure to the rest of the Ezra group remains to be seen.

Ezra is the fourth Singapore-listed company to collapse amid the most brutal oil-price downturn in 30 years. Swiber, Swissco and Technics Oil & Gas filed for judicial management last year.

Benchmark Brent crude hovered just above US$51 a barrel on Monday.