Ezra says may take US$170m writedown from Emas Chiyoda Subsea

Ezra Holdings' subsea construction vessel Lewek Constellation.
Ezra Holdings' subsea construction vessel Lewek Constellation.PHOTO: EZRA HOLDINGS

SINGAPORE - Offshore and subsea operator Ezra Holdings revealed on Friday (Feb 3) that it may have to take a US$170 million (S$240 million) writedown for its exposure to the troubled joint venture company Emas Chiyoda Subsea.

Ezra has a 40 per cent stake in Emas Chiyoda, and US$170 million represents Ezra's total investment in, loans to and inter-company balances owed by Emas Chiyoda.

"The full amount may have to be written down after the company's assessment," Ezra said in a filing with the Singapore Exchange.

The company added that it reported a net current liability position of US$887.2 million for the financial year ended August 31, 2016.

Ezra said it has been working with its advisors to review all options to restructure its businesses, operations and balance sheet "in light of the severe and protracted downturn in the global oil and gas industry".

As it previously disclosed, Ezra will be faced with a going concern issue if the restructuring is not favourably completed in a timely manner.

Ezra also said in Friday's filing that Norwegian shipowner Forland Subsea AS has agreed not to pursue repayment of a defaulted charter payment due November last year from a unit of Emas Chiyoda.

The obligation to Forland was guaranteed by Ezra, and Forland has not called upon Ezra as guarantor to repay the default, Ezra said.

Trading of Ezra shares remains halted.