Ezra's insolvency leads to delayed salaries at Triyards

Triyards' shipyard in Vietnam. Cash flow problems have hindered Triyards from executing shipbuilding projects in Vietnam.
Triyards' shipyard in Vietnam. Cash flow problems have hindered Triyards from executing shipbuilding projects in Vietnam.PHOTO: TRIYARDS

Financing situation is turning around and Vietnam staff wages 'brought up to speed', says CEO

Embattled Triyards acknowledged yesterday that it had to delay salary payments in Vietnam after facing difficulty drawing on lines of finance.

Chief executive Chan Eng Yew said the salaries were paid yesterday and "brought current" this week. He added that the affected salaries were to come from project financing lines that experienced "cascading effects" from the default of banking facilities guaranteed by parent group Ezra Holdings.

Triyards has since repaid these Ezra-linked loans that had been "in default" since its parent group filed for Chapter 11 protection with a United States court in March last year.

But Mr Chan said the situation was turning around with several banks having "just recommenced their funding to their respective projects", which also allowed the salaries to be "brought up to speed".

Mr Chan has been in Vietnam for about two months and was granted "consular" support while proceedings linked to the unpaid salaries were under way.

He said his travels were "not restricted in any way" during his extended stay in the country, adding: "We have every intention to continue operating in Vietnam."

Cash flow problems have hindered Triyards from executing shipbuilding projects in Vietnam.

Last December, it said its Vietnam unit had received termination notices for two contracts due to a lack of funding to complete the vessels for delivery by the contracted dates. In March, the group saw its chemical tanker order terminated, with the buyer seeking reimbursement of US$5.1 million (S$6.9 million) paid in advance for the vessel.

Triyards posted a net loss of US$162.5 million for the 12 months to Aug 31 last year.

In March, then chief financial officer Yan Naing Aung resigned "to pursue other career opportunities".

Shares in the group had been pledged by Ezra to OCBC and DBS in exchange for $100 million of bank borrowings back in July 2016.

While troubles at Triyards and parent company Ezra are not new and the two counters have been on trading suspension for months, lawyer Robson Lee argues that as Singapore-listed companies, they should still be held responsible for any lapses in disclosures.

Mr Lee, a Singapore-based partner in US law firm Gibson Dunn, asked why Triyards and Ezra did not disclose the delay in salary payments to staff in Vietnam if Mr Chan had been there for months to resolve the issue.

A version of this article appeared in the print edition of The Straits Times on July 10, 2018, with the headline 'Ezra's insolvency leads to delayed salaries at Triyards'. Print Edition | Subscribe