Singapore’s Ezra Holdings has filed for chapter 11 bankruptcy protection in the Southern District of New York US Bankruptcy Court.
Filing under Ezra Holdings Limited, the Singapore company lists its primary place of business in New York State and includes subsidiary companies Emas Marine Services Pte Ltd and Emas IT Solutions Pte Ltd in the filing. Ezra Holdings Limited is described as an investment holding company for the Ezra Group.
Robin Chiu has been appointed chief restructuring officer and said in a declaration of support for the filing that the difficult operating environment in the oil and gas industry has had a direct adverse impact on each of the group’s business divisions.
Chiu said: “Besides Ezra’s status as a company listed on the SGX-ST, as a holding company, its primary assets are its investments in its respective business divisions and it is dependent on the returns from such investments and management fees for support services to each of its business divisions to meet its own financial obligations. Accordingly, Ezra’s financial position has suffered as its business divisions were adversely impacted by the extremely challenging operating environment.”
Ezra recorded revenues of $525 million but still suffered a net loss of around $850 million in the financial year ended August 31, 2016.
“The prolonged deterioration of the financial performance of Ezra’s business divisions and the inability to carry out fundraising in the oil and gas industry resulted in Ezra facing a cash crunch and an inability to pay their debts as they come due,” Chiu said.
The largest unsecured creditors listed in the filing are Singapore financial institutions DBS Bank at $272m, OCBC Bank at $184.5m and HSBC Institutional Trust Services at $108.5m.
“Our exposures to Ezra Holdings were moved to non performing in the third quarter, and suitable provisions have been made,” a spokesperson from DBS told Splash.
Court documents also reveal that Ezra was faced with pending or threatened action of proceedings from a long list of companies which include VT Halter Marine, Aker Solutions DNB Bank, Svenska Handelsbanken, Forland Subsea, Standard Chartered Bank, Australia and New Zealand Banking Group and Citibank.
As of the end of its 2016 financial year, Ezra had long-term assets valued at around $515 million, and current assets valued at approximately $220 million.
The first major sign of cracks in the Ezra Group started to appear in December 2016 when subsea joint venture Emas Chiyoda Subsea defaulted on a bareboat charter contract with Norway’s Forland Subsea. By the end of February, Emas Chiyoda Subsea had filed for chapter 11 in the US Bankruptcy Court in Texas.
In an email to staff seen by Splash, Ezra founder Lee Kian Soo told staff that the company “does not envisage other Emas Group entities to go through similar exercise at this moment.”
Lee also told staff that the announcement had no immediate impact on the day-to-day operations of the company.
Ezra Holdings shares have been suspended from trading on the Singapore Exchange.