Hot stock: Ezra shares dive as going concern issues stick

SHARES of Ezra Holdings dived on Friday after the group said that the Chapter 11 filing on associated company Emas Chiyoda Subsea (ECS Group) does not deal with its charter-hire liabilities of hundreds of millions that relate to vessels chartered by the ECS Group.

The stock fell to S$0.013, down 0.6 cent or 31.6 per cent. Ezra lifted a trading halt at 12 pm.

The embattled oil-and-gas firm said late Thursday evening that it will still face going concern issues if creditors make claims against the liabilities that are guaranteed by Ezra.

Ezra said that it has guaranteed a substantial proportion of these liabilities, which total to about US$0.4 billion. In addition, the ECS Group currently has an aggregate of about US$0.5 billion of loans owing to financial institutions. These are guaranteed by Ezra.

Ezra also has "substantial contingent liabilities" relating to performance and bank guarantees granted by it for projects of ECS Group. These cannot be quantified as ECS Group wants to continue with these projects.

On top of the Chapter 11 filing, ECS Group had placed its Norway-based subsidiary under members' voluntary liquidation in Norway.

Ezra pointed to an expired deadline for payments related to this unit, EMAS-AMC. This refers to statutory demands from one of Ezra's lenders relating to a claim by Forland Subsea on a corporate guarantee provided by Ezra over outstanding charter hire payments owing by EMAS-AMC.

"These creditors are at liberty to apply for the company to be wound up by the High Court of Singapore upon the ground . . . that the company is unable to pay its debts. Notwithstanding the foregoing, the company is continuing its efforts to engage these creditors in relation to these claims."