EOL details $760m financial ties to Ezra

Singapore owner remains in talks with banks after parent files for bankruptcy.

Singapore owner EMAS Offshore Limited (EOL) remains in talks with its banks after its ultimate holding company Ezra Holdings filed for bankruptcy restructuring in the US on Monday.

It admitted the Ezra situation "may have a negative impact", and is seeking advice, as well as assessing how it will affect ongoing initiatives to refinance and secure further working capital.

"In the event that these efforts do not achieve a favourable and timely outcome, the group will be faced with a going concern issue," it added.

EOL said that as of 30 November it owed $170m to Ezra, of which $125m was subject to a deferred payment over a period of three years.

It also has bank loans of $566m, of which $242m is guaranteed or secured by Ezra and $193m is jointly guaranteed or secured by Ezra and itself.

In addition, it has "substantial charter hire liabilities" of $231m that are guaranteed solely by Ezra to the tune of $119m, while $58m is guaranteed by Ezra and EOL.

EOL said the Ezra filing may constitute events of default with its banks and charterparties.

"The moratorium afforded under the Ezra Chapter 11 filing does not stay claims against the group," it added.

But it was unaware of any demand made as yet by financial institutions.

Ezra filed weeks after an earlier bankruptcy process entered into by another subsidiary, EMAS Chiyoda Subsea, in February.