Ezra faces US$194.5m claim tied to Lewek Champion lease

OFFSHORE and marine group Ezra Holdings is facing a claim for US$194.5 million as the guarantor of a bareboat charter on pipelay vessel Lewek Champion.

Ezra disclosed the claim in an announcement issued on Sunday, stating that Hai Jiang 1401 Pte Ltd, the vessel-owning unit of ICBC Financial Leasing Co Ltd, has demanded a payment of the termination sum of US$194.5 million within 15 days from the date of a notice of termination.

The notice of termination was served to Ezra on March 9, 2017, two days after Ezra's associate Emas Chiyoda Subsea (ECS) and its affiliates filed a debtor's motion with the US Bankruptcy Court to reject a back-to-back bareboat charter dated Feb 19, 2014 on Lewek Champion, a vessel in Emas Offshore Limited's (EOL) operating fleet.

Hai Jiang 1401 noted the debtor's motion filed to reject the bareboat charter in its notice of termination.

In addition, the vessel owner also cited three other events supporting its notice of termination.

First, Lewek Champion Shipping Pte Ltd, a wholly owned subsidiary of EOL, has defaulted on payment of US$1.6 million payable under the bareboat charter.

Second, ECS being the sub-sub-charterer of the vessel, has also filed an application to the Singapore courts for a stay order on claims against the company, following a Chapter 11 application with the US bankruptcy court.

Third, Lewek Champion was seized and/or detained by Huisman Equipment BV in Xiamen, China since Feb 18, 2017.

Hai Jiang 1401 had appointed Joshua James Taylor and Yit Chee Wah of FTI Consulting (S) Pte Ltd as the joint receivers and managers of certain assets of the vessel charterer, Lewek Champion Shipping Pte Ltd.

Ezra and its affected direct or indirect subsidiaries are seeking legal advice on the impact of Hai Jiang 1401's notice of termination, claim and appointment of joint receivers and managers.