DBS appoints receiver for Triyards unit Strategic Marine to protect its claims

Singapore

DBS Bank has appointed a receiver for a key subsidiary of Singapore-listed Triyards Holdings after filing claims against the embattled yard operating arm of Ezra Holdings.

The bank has named Justin Lim Loo Khoon of Deloittee & Touche as receiver for Singapore-incorporated Strategic Marine.

In addition to the property and assets of Strategic Marine, the yard group said DBS has laid claims on items named in a deed of assignment dated May 5, 2016 and a mortgage arrangement dated Feb 7, 2017. These include a hull and a construction contract of its subsidiary, Saigon Offshore Fabrication and Engineering, the vessel, Lewek Hercules and earnings accruing to the vessel.

Mr Lim's appointment comes in the wake of Triyards' disclosure on Sept 7 the receipt of letters of demand for claims of about US$43.9 million from DBS.

The legal action has raised fresh doubts over Triyards' protracted restructuring exercise. One trade creditor of Triyards viewed it as a sign that DBS wants to "close out" its exposure to the beleaguered oil-linked offshore and marine (O&M) sector. He said the bank may no longer see the point of participating in an exercise that has "dragged on for too long".

As the yard operating arm of erstwhile stock market darling, Ezra Holdings, Triyards had stayed profitable over two years into a prolonged O&M downturn by diversifying away from projects linked to the troubled upstream oil and gas industry. But it eventually slipped into the red last July and rounded off 2017 with a loss of US$162.5 million.

In February 2018, Triyards landed a potential rescue financing deal with Ferrell Vanguard Fund SPC but the deal was effected only this August after the potential white knight delivered the remaining US$3.8 million of a US$5 million pledged loan.

Amid the months-long wait, Triyards saw several of its shipbuilding contracts terminated. The yard group acknowledged in July that it had owed workers salaries in Vietnam, a situation it has since rectified.

It further disclosed last month, following news reports about its trade claims, the receipts of letters of demand from certain lenders and creditors in addition to a winding-up petition filed by a trade creditor.

Trade creditors and affected staff have earlier raised concerns over what they deemed as disclosure lapses on material events tied to Triyards' protracted restructuring process.

Such concerns have resurfaced with the yard group once again seen as having fallen behind on its disclosure with respect to DBS's move. It has taken the yard group about a week after being notified of Mr Lim's appointment to disclose the matter.

Lawyer Robson Lee pointed out that despite a standing trading suspension that has been in force for months, the management of Triyards are still accountable for keeping stakeholders informed of material developments.

While creditors with larger exposure tend to have early access to certain information, Mr Lee argued for the case of "levelling up the playing field" for other stakeholders including shareholders and trade creditors.

Triyards shares were suspended from trading last September, about six months after Ezra filed for US Chapter 11 bankruptcy protection.