Singapore-listed Emas Offshore tries to terminate obligation to pay $43m

Lewek Constellation, a construction vessel by Emas Offshore.
Lewek Constellation, a construction vessel by Emas Offshore.PHOTO: EMAS OFFSHORE

SINGAPORE - Offshore marine contractor Emas Offshore is trying to rid itself of an obligation to pay US$43 million (S$61.3 million) to the collapsed Perisai Petroleum Teknologi as part of an agreement between the two parties four years ago.

In a statement to the Singapore Exchange late on Thursday night (Dec 8), Emas - a subsidiary of Ezra Holdings - said that it has issued a notification of termination of the share sale agreement and a separate "shareholders' agreement" due to certain breaches by Perisai.

It did not elaborate on the breaches.

Emas had been in talks with Perisai, a joint venture partner, since October to try to resolve various issues among themselves.

But despite the efforts made by both sides, they had yet to fully resolve the various issues, Emas said on Thursday.

Back in December 2012, Emas and Perisai entered into an agreement that gives Perisai the right to exercise a "put option" to sell its 51 per cent stake in subsidiary SJR Marine and a mobile offshore production unit to Emas for US$43 million. The put was originally exercisable on Nov 26.

On Dec 1, Emas said that it had reached an interim agreement with Perisai to defer the exercise of the put option to after close of business on Dec 8.

If the share sale agreement is in fact terminated, the put option will be extinguished. Perisai will remain the 51 per cent shareholder of SJR while Emas will retain its 49 per cent share.

Under the terms of the shareholders' agreement, Perisai is required to sell its 51 per cent shares in SJR to Emas for US$1 apiece, Emas said.