SINGAPORE - Triyards Holdings has converted its trading halt into a trading suspension with immediate effect, after being slapped by demand letters from two lenders.
Triyards is the yard-operating unit of offshore marine giant Ezra Holdings, which filed for bankruptcy protection in March.
In a bourse filing on Wednesday (Sept 6), Triyards said it is "experiencing difficulties in gaining access to new sources of liquidity in the current environment".
The situation has worsened after the release of its earnings report on July 21, it said.
Triyards has received demand letters from two lenders for overdue loan instalments amounting to US$800,000 (S$1.08 million).
Triyards said payment delays from its clients for certain completed projects, owing to the severe oil industry downturn, had strained its resources and rendered it unable to meet these loan repayments.
Negotiations with these lenders are underway, but if the talks fail the lenders could call for the entire outstanding loan amount of US$ 6.9 million. This might also result in cross default on other loans granted by other financial institutions to Triyards.
Triyards' principal bankers include Chinatrust Commercial Bank Co, DBS Bank, OCBC and UOB, according to its last annual report.
Ezra Holdings owns 60.9 per cent of Triyards shares. Last year, Ezra pledged this stake as well as a 75.5 per cent stake in Emas Offshore Limited (EOL) to DBS and OCBC to secure financing.
DBS and OCBC each have a charge over 30.46 per cent of Triyards.
"The group is not in a position to assess reasonably its financial position and could have a potential going concern issue until a viable restructuring plan is in place," said Triyards.
It has therefore requested for a share suspension.
Although Triyards has been unable to deliver certain vessels within the contractual delivery dates, none of these clients has served notices of cancellation, it added.
It is now negotiating with these clients to establish new delivery timelines.
Triyards is also seeking more financing from lenders, and has hired a financial adviser who is working with it on a restructuring plan to present to its stakeholders.
Triyards shares last changed hands at 8.4 Singapore cents on August 31.