March 20, 2017 12:41 pm JST

Ezra succumbs to oil woes, files for US bankruptcy protection

SINGAPORE (NewsRise) -- Offshore oilfield services group Ezra Holdings said it has filed for bankruptcy protection in the U.S., highlighting the continued stress on Singapore's large oil and gas services industry from depressed crude prices.

Ezra is the guarantor for some $900 million in debt and liabilities owed by EMAS Chiyoda Subsea, a joint venture which provides specialized vessels used in the construction and installation of offshore facilities. It also has a 150 million Singapore dollar ($107 million) notes issue that is due in 2018.

By filing for reorganization under Chapter 11 of the U.S. bankruptcy code, Ezra is seeking a moratorium on payments to creditors and to prevent them from seizing its assets, while allowing existing managers to work out a debt repayment plan under the court's supervision.

Once held up as a shining example of home-grown enterprise in Singapore, Ezra's problems escalated as oil prices tumbled, shrinking demand for its services from companies.

The debt-laden company faced claims from creditors in recent weeks and the question whether Ezra would be able to survive as a going concern gathered force after EMAS Chiyoda filed for bankruptcy protection in the U.S. in February.

Singapore-based offshore services firms that have run into financial difficulties include Swiber Holdings and Swissco Holdings, both of which were placed under judicial management last year after missing payments to debt holders.

Singapore is a major player in the global offshore and marine industry, with home-grown companies such as Keppel Corp. and Sembcorp Marine holding some 70% of the market share for jack-up oil rigs and floating, production, storage and offloading vessels.

The industry contributes around S$6.4 billion in value-added to the Singapore economy, or about 1.8% of gross domestic product, according to SPRING, the government agency tasked with helping Singapore companies that recently began offering bridging loans to help offshore and marine firms.

Stock broker CIMB estimates that Ezra owes DBS Group Holdings, Singapore's largest lender, around S$640 million, while Oversea-Chinese Banking Corp. and United Overseas Bank Ltd. have exposures of around S$300 million and S$166 million, respectively.

The three Singapore lenders have already increased provisions for bad debt, although it is unclear if the provisions are sufficient to cover losses such as those arising from Ezra's bankruptcy filing.

In a separate announcement on Sunday, the Singapore Exchange said it has asked Ezra to convene a meeting with note holders and that the company is agreeable.

"SGX has informed the Securities Investors Association (Singapore) of the development and has invited SIAS and its legal advisers to participate in the arrangements put in place for note holders," the Singapore bourse operator added.

Ezra shares have been suspended from trading since March 15 and were last traded at 1 Singapore cent a share.

--Kevin Lim

Asia300

Keppel Corp. Ltd.

Singapore

Market(Ticker): SES(BN4)
Sector:
Industry:
Producer Manufacturing
Industrial Conglomerates
Market cap(USD): 8,539.31M
Shares: 1,817.91M
Asia300

Oversea-Chinese Banking Corp. Ltd.

Singapore

Market(Ticker): SES(O39)
Sector:
Industry:
Finance
Regional Banks
Market cap(USD): 29,353.47M
Shares: 4,193.72M
Asia300

United Overseas Bank Ltd. (Singapore)

Singapore

Market(Ticker): SES(U11)
Sector:
Industry:
Finance
Regional Banks
Market cap(USD): 25,642.10M
Shares: 1,646.96M
Asia300

Singapore Exchange Ltd.

Singapore

Market(Ticker): SES(S68)
Sector:
Industry:
Finance
Investment Banks/Brokers
Market cap(USD): 5,694.78M
Shares: 1,071.64M

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