Ezion to take control of JVs with Swissco unit

A Swissco oil rig. The troubled company's interim judicial managers yesterday said they are assessing five indicative bids, and formal bids are expected by the second week of April.
A Swissco oil rig. The troubled company's interim judicial managers yesterday said they are assessing five indicative bids, and formal bids are expected by the second week of April.PHOTO: SWISSCO HOLDINGS LIMITED

Two joint ventures unable to meet obligations, partly due to marine firm's woes

Oilfield services provider Ezion Holdings yesterday said it plans to take full control of two joint ventures it entered into with a unit of troubled Swissco Holdings for a combined $5 million.

It will also acquire related rigs and other assets for a further US$61.9 million (S$86.3 million).

One of the deals involves Ezion buying the remaining 50 per cent stake in investment holding company Strategic Offshore Limited - a joint venture between Swissco unit Scott and English Energy and Ezion Investments - for $3.5 million.

It will also acquire 50 per cent of rig owning and chartering company Strategic Excellence Limited - another joint venture between the two parties - for $1.5 million.

This comes as the two joint venture companies are unable to meet their obligations, due in part to the financial situation faced by Swissco, which has been put under interim judicial management.

As a result, the joint ventures were not able to operate effectively, Ezion said in an exchange filing yesterday.

Ezion said it plans to work closely with customers of the joint venture companies after the acquisition, to maximise the utilisation of their assets.

It added that it was "necessary" for the group to buy the remaining 50 per cent shares of the joint venture companies to ensure they can continue operating and engaging with existing customers.

Ezion said it plans to work closely with customers of the joint venture companies after the acquisition, to maximise the utilisation of their assets. It also aims to help improve long-term earnings by "working towards cost-reduction through the realisation of economies of scale with the group's own fleet of assets".

Ezion will fund the acquisitions through bank loans and internal resources.

Separately, Swissco's interim judicial managers yesterday said they are assessing five indicative bids, and formal bids are expected by the second week of April. The bids were whittled down from 12 non- binding expressions of interest.

The hearing of the judicial management applications has been adjourned to April 21 in the High Court.

A version of this article appeared in the print edition of The Straits Times on March 29, 2017, with the headline 'Ezion to take control of JVs with Swissco unit'. Print Edition | Subscribe