Emas applies for judicial management after failed rescue deals

Singapore

AILING offshore services provider Emas Offshore has applied to be placed under judicial management, five months after a rescue plan for the company was called off.

Judicial management is a rescue procedure to restructure a distressed company's debt. An independent judicial manager will be appointed to take control of the firm's affairs, business and property, in an attempt to help it survive, get a scheme of arrangement approved or a more advantageous realisation of the company's assets versus that in a liquidation.

In a Singapore Exchange notification on Monday, Emas said it filed an application in the High Court of Singapore on July 19 for it to be placed under judicial management pursuant to Section 227B of the Companies Act.

Following this move, a moratorium will be in place until either the order is granted for judicial management or the application is dismissed.

Emas said it will provide further updates on the application in compliance with Oslo listing requirements or when there are material developments. The firm noted that shareholders should consult their financial, tax or other advisers when in doubt as to the action they should take.

The latest development follows failed attempts to bail out Emas or related units.

In February this year, Philippine group Udenna Corporation informed Emas that its proposed investment of US$73.29 million would not take place, after both parties had inked a non-binding term sheet in October 2018. No reasons were given for Udenna's decision. The deal would have seen Udenna pump money into Emas' subsidiary as part of the group's financial restructuring. A portion of the funds was earmarked towards buying Emas vessels that have been secured to bank lenders.

Prior to that, in July 2018 oil and gas equipment supplier Baker Technology also pulled out of its plan to invest in Emas. Baker Technology terminated the term sheet for an equity injection of US$50 million.

Trading in dual-listed Emas was suspended in Singapore in 2017, and the stock has been the target of delisting attempts by the Oslo Stock Exchange.

Emas is a subsidiary of former stock market darling Ezra Holdings, which filed for bankruptcy protection in the US under Chapter 11 in 2017 after receiving two statutory demands from creditors. Ezra's secured creditors include DBS Bank, OCBC Bank and United Overseas Bank, according to US Bankruptcy Court documents.