Debt-stricken offshore and marine group Ezion Holdings swung to hefty losses for the second quarter, while its potential white knight, Malaysia-listed Yinson Holdings, continues to negotiate with lenders before extending a lifeline.
In its results announcement last Friday, Ezion said it has been informed that Yinson Eden, an indirect wholly owned subsidiary of Yinson Holdings, is still in negotiations with Ezion's designated lenders.
Under a conditional debt conversion agreement, Yinson was to acquire the rights and benefits of Ezion's US$916 million (S$1.27 billion) debt.
On its side, Yinson has also said that the deal is currently pending banks' approvals, with due diligence ongoing, according to a New Straits Times report last month. Yinson's group chief executive did not disclose any timeline for the acquisition.
In its outlook, Ezion warned: "Should the prolonged delay in the completion of the Yinson subscription and unavailability of funds from the lenders continue, the group's deployment plan for its assets may be further hindered and the group may incur further losses, going forward."
This was one of the factors behind Ezion's post-tax loss of US$363.9 million for the second quarter ended June 30, versus a US$96.1 million profit in the same period a year ago, in line with its profit guidance earlier.
Loss per share was 9.76 US cents, a reversal from earnings per share of 3.11 US cents last year.
The group was affected by an impairment loss, which widened to US$303.6 million, against US$250,000 in the previous year. The losses comprise mainly impairment losses on loans to associates, loans to joint ventures, plant and equipment, and trade and other receivables.
The outlook for the offshore marine industry remains "challenging and competitive in view of the oversupply of offshore logistics vessels and jack-up rigs in the industry", Ezion also noted.
For the first half-year, Ezion recorded a post-tax loss of US$376.8 million, versus a profit of US$55.7 million for the same period a year ago.
Impairment losses stood at US$303.8 million, in contrast to a loss reversal of US$163,000 in the previous year.
Loss per share for the half-year was 10.12 US cents, versus 2.19 cents a year ago.
Ezion said: "In view of the additional problems and material losses arising from the unexpected prolonged negotiations between the designated lenders and Yinson, the group is exploring with Yinson on actions and solutions that will best serve the interests of all stakeholders."
Trading in Ezion shares has been suspended since March.