Subsea affiliate of Singapore's Ezra files for U.S. bankruptcy

Ezra Holdings

28/02/2017 17:53

By Tom Hals 
    Feb 28 (Reuters) - A subsea and offshore contractor 
affiliate of Ezra Holdings Ltd  EZRA.SI , a struggling 
Singaporean oilfield services firm, filed for U.S. bankruptcy as 
it ran short of cash due to a lingering downturn in the 
oil-and-gas industry. 
    The affiliate, Emas Chiyoda Subsea Ltd, said in court papers 
filed in Houston that the company was suffering from weak demand 
for its subsea contracting work and tightening credit 
conditions. 
    Ezra has said it may have to take a $170 million writedown 
on the value of its investment in Emas Chiyoda.  urn:newsml:reuters.com:*:nL4N1FN16V 
    Oilfield service firms have been turning to bankruptcy to 
shed debt and raise cash after years of hunkering down after 
energy prices tumbled from the recent peak in 2014.  urn:newsml:reuters.com:*:nL1N1E2298 
    Emas Chiyoda's bankruptcy comes eight months after it teamed 
up with India's Larsen & Toubro Ltd  LART.NS  to land a $1.6 
billion contract with Saudi Aramco, Saudi Arabia's state-owned 
oil company, to expand the offshore Hasbah gas field. 
 urn:newsml:reuters.com:*:nL5N18C05U 
    Onshore work has begun and the offshore phase of the Hasbah 
project will begin later this year, said Emas Chiyoda's general 
counsel, Stephen McGuire, in a court filing. 
    The company, which is based in Birmingham, United Kingdom, 
said it had about $550 million in debt. 
    "As a result of the deteriorating market conditions in the 
oil and gas sector coupled with the company's financial 
difficulties, the company's lenders have frozen borrowing 
availability," McGuire said in a court filing. 
    The company has requested court permission to borrow up to 
$90 million to allow it continue its current projects with 
minimal disruption. The company will seek access to $55 million 
of the proposed loan at a hearing on Wednesday in Houston. 
    The proposed loan is being extended by Chiyoda Corp  6366.T  
of Japan and Subsea 7 S.A.  SUBC.OL  of the United Kingdom, 
according to court documents. 
    The loan requires Emas Chiyoda to file a bankruptcy exit 
plan in 60 days and to have the plan confirmed by U.S. 
Bankruptcy Judge Marvin Isgur, who was assigned to the case, in 
120 days. 
     Ezra of Singapore owns 40 percent of Emas Chiyoda, Chiyoda 
owns 35 percent and Nippon Yusen KK  9101.T  of Japan owns the 
remainder, according to court documents. 
    A creditor of a subsidiary of Emas Chiyoda filed a court 
petition this month to liquidate the unit.  urn:newsml:reuters.com:*:nL4N1G003B 
 
 (Reporting by Tom Hals in Wilmington, Delaware; Editing by 
Noeleen Walder, Bernard Orr) 
 ((thomas.hals@thomsonreuters.com; +1 610 544 2712; Reuters 
Messaging: thomas.hals.thomsonreuters.com@reuters.net)) 
 
Keywords: EZRA HLDGS AFFILIATE/BANKRUPTCY