Embattled Ezra Holdings faces another tense fight as it stands accused of failing to pay up for a charter of a Norwegian subsea ship, while also seeking a pay standstill on another ship it is chartering.
EMAS Chiyoda Subsea, the joint venture between Singapore’s Ezra and Japan’s Chiyoda and NYK, has defaulted on the charter of the Lewek Inspector, owned by Forland Shipping. EMAS Chiyoda Subsea had until the end of last month to stump up the cash for October’s charter payments. It failed to come up with the money and yesterday the joint venture told Forland, a subsidiary of Frode Bjørn, it is unable to settle the outstanding charter hire for the time being, citing “financial distress”, according to a release from Forland today.
The obligations under the charterparty are guaranteed by Singapore-listed Ezra, run by Lionel Lee.
“Forland will assess and explore the consequences of the payment default and the options available to it, including the remedies available to it under the charterparty,” the Norwegian company said in a release.
“We have no additional information at the moment,” Frode Bjørn Forland, the head of the company, told Splash by text message.
The Lewek Inspector was built in 2013, and has been on charter to EMAS ever since.
Ezra Holdings appears to be walking a tightrope in the current environment of low oil prices. RHB Research, in a note at the beginning of the year, said that Ezra’s share price to book value indicated that the market expectation for the group is bankruptcy.
Another Ezra company, Emas Offshore is also having difficulties with Malaysia’s Perisai Petroleum Teknologi regarding a put option on a 51% stake in joint-owned company SJR Marine.
Ezra’s share price was trading at 5.1 cents down 3.77% at 4.30pm today, having once traded as high as S$1.39 in 2013.
The Lewek Inspector is one of just two ships owned by Forland – the other is Fugro Saltire.
Separately today another Oslo-listed firm Ocean Yield revealed EMAS Chiyoda Subsea has sought a short-term standstill agreement relating to the bareboat charter of the Lewek Connector for December and January.
“Given the challenging offshore market, the parent company of EMAS AMC AS, EMAS Chiyoda Subsea, has initiated discussions with its creditors in order to restructure and recapitalise the company,” Ocean Yield said in a release.
Like the Lewek Inspector, the obligations under the charterparty for the Lewek Connector are guaranteed by Ezra.