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Ezra files for US bankruptcy as marine debt crunch spreads
[SINGAPORE] Ezra Holdings Ltd, a Singapore-listed oilfield services group, filed for bankruptcy in the US after weeks of facing hostile actions from creditors at home and abroad as it struggles to recover from a slump in oil prices over the past three years.
The company filed voluntary petitions for reorganization under Chapter 11 of the US Bankruptcy Code, according to a stock exchange filing on Sunday. Ezra will hold an informal meeting as soon as "reasonably practicable" to update and provide further information on the Chapter 11 filing to holders of its debt, it said in a separate statement. The company has also reached out to and intends to work with the Securities Investors Association (Singapore).
"The Ezra Chapter 11 filing is intended to optimize the scope and extent of the restructuring options available and to protect the interests of all stakeholders of the company, including its creditors and shareholders, from hostile actions that could harm the company and its stakeholders by diminishing the group's value," according to the statement.
Ezra's shares, down 78 per cent this year following declines of more than 50 per cent in each of the past three years, have been suspended from trading since March 15. A S$2 billion company at its peak a decade ago, Ezra's market value has shrunk to about S$32 million. The fallout may spread to other sectors related to the offshore and marine services company.
"Offshore and marine companies and banks would be negatively affected by this development. No one knows if they have fully provided for Ezra," Foo Zhiwei, an analyst at UOB Kay Hian Pte. in Singapore, said by telephone after the filing was released. "There would be a knee-jerk reaction in the shares of Ezra and related sectors." Ezra last published its earnings in November, when losses widened to $339.6 million for the quarter ended Aug. 31 from $7.8 million a year earlier. It listed about $623 million of total assets and $1.51 billion of total liabilities. The group hasn't disclosed earnings for the quarter ended Nov 30. It has requested a time extension while it seeks to consolidate funding requirements.
The latest filing adds to the troubles faced by offshore oil and gas services companies in Singapore whose contracts have been pushed back or canceled as a slide in crude prices forced explorers to cut spending. Swiber Holdings Ltd and Swissco Holdings Ltd earlier won court approval to reorganize their debt, while others like Ezion Holdings Ltd and KrisEnergy Ltd. sought and won forbearance from creditors and lenders.