EOL unit faces winding-up threat from bareboat charter claims

A TRADE creditor has threatened to wind up a subsidiary of Emas Offshore Limited (EOL) if a claim in excess of US$195 million that is tied to a bareboat charter is not paid up within a stipulated timeframe.

EOL said before Tuesday trading close that its wholly owned subsidiary, Lewek Champion Shipping Pte Ltd, has received a statutory demand dated April 12 from the solicitors of vessel owner Hai Jiang 1401 Pte Ltd.

The vessel owner stated that if payment for the claim in excess of US$195 million is not paid up within 21 days from the date of service of the statutory demand, a winding-up application will be filed against the EOL subsidiary.

The claim comprised US$194,499,500.00 being the termination sum and US$522,217.84 being the accrued contractual interest under the bareboat charter between the vessel owner and the EOL subsidiary.

EOL and its subsidiary are seeking legal advice in respect of the statutory demand. The listed company is also assessing the impact of the statutory demand.

Hai Jiang 1401 Pte Ltd has served a notice of termination in relation to the bareboat charter with EOL's subsidiary after Emas Chiyoda Subsea (ECS) and its affiliates field a debtor's motion with the US bankruptcy court to reject a back-to-back bareboat charter dated Feb 19, 2014 on the pipelay vessel Lewek Champion.

In March, EOL's parent group Ezra Holdings said that the group faced a claim of US$194.5 million from Lewek Champion in relation to a guarantee extended to the vessel's bareboat charter.