More uncertainty surrounds Ezra Holdings as financial claims against the offshore and subsea contractor pile up while its talks with lenders seem to crawl along after a fiasco involving Malaysian associate Perisai.
It came out on Tuesday that subsea services provider Bibby Offshore had filed for arbitration against Emas Chiyoda Subsea, claiming it is owed a reported US$14.7 million (S$20.8 million) from US$18.1 million of contracts performed in Trinidad last year.
This is the subsea business that Ezra sold to Chiyoda Corp and Nippon Yusen Kabushiki Kaisha (NYK) last year. Emas Chiyoda Subsea is 40 per cent owned by Ezra. Chiyoda has a 35 per cent interest and NYK holds a 25 per cent stake.
Although few analysts still cover Ezra, many believe its fate hangs on the patience of its bankers, including all three local lenders.
In an update last month, Ezra said it was still in talks with various stakeholders to consolidate its funding requirements.
Ezra will face a "going concern" issue if these efforts do not achieve a favourable and timely outcome.
Amount reportedly owed to Bibby Offshore for work performed in Trinidad last year
Chiyoda's expected risk and expenses for its stake in Emas Chiyoda Subsea
NYK's expected extraordinary loss
A spokesman for Ezra declined to comment on the firm's solvency in the light of recent developments, stating that Emas Chiyoda Subsea is a joint-venture company.
On Tuesday, Chiyoda said it expects to incur risks and expenses of about 38 billion yen (S$475 million) from its stake in Emas Chiyoda Subsea; NYK expects an extraordinary loss of about 13 billion yen (S$162 million).
In December, Norwegian shipowner Forland Subsea AS said a unit of Emas Chiyoda had defaulted on a charter payment due Nov 30 for the vessel Lewek Inspector, which the unit said it was unable to settle "due to financial distress". A temporary agreement was reached and the Lewek Inspector allowed to resume work offshore Congo.
During the same time, the Emas Chiyoda unit sought a short-term standstill agreement from another trade creditor - Ocean Yield ASA - relating to charter payments for the Lewek Connector for the months of December and January.
Both the obligations to Forland Subsea and Ocean Yield are guaranteed by Ezra.
Ezra has bought time with the standstills, but much depends on when it will resolve a US$43 million put option with defaulted associate Perisai Petroleum Teknologi, which triggered cross defaults at other Emas Offshore (EOL) entities. Ezra unit EOL said last month that though all its lenders had agreed to a refinancing, this was delayed due to a lack of resolution with Perisai.
Ezra called for a trading halt yesterday morning pending an announcement. It has applied to the Singapore Exchange for a 30-day extension from Jan 14 to announce its financial statements for the first quarter ended Nov 30 last year.