Ezion to 'vigorously defend' against US$100m claim

MAINBOARD-LISTED offshore and marine service provider Ezion Holdings plans to fight a multimillion-dollar claim against its subsidiary, the board announced late on Friday night.

Ezion's wholly-owned Teras Conquest 2 (TC2PL) has been slapped with a notice of arbitration by Whitesea Shipping & Supply, which describes itself on its corporate website as an offshore support vessel operator based in the United Arab Emirates.

The legal tussle centres on how TC2PL did not deliver a vessel, Rising Phoenix, to Whitesea - which the claimant alleges breached a July 2016 deal and led to the expectation loss of more than US$100 million on the profits that Whitesea had expected to earn from the vessel.

But TC2PL's position is that it was not obliged to hand over Rising Phoenix to Whitesea, "because, amongst other things, the claimant did not make payment" under their agreement. The outstanding purchase price for the vessel, according to Ezion's description of the claim, was some US$48 million. The Business Times understands that the outstanding amount for the vessel is among the issues to be addressed by arbitration.(see amendment note)

Whitesea has turned to the Singapore International Arbitration Centre to appoint a single arbitrator, and Ezion "intends to vigorously defend" against the proceedings, the board said.

The troubled liftboat operator added that it "does not believe that the proceedings will cause any material disruptions to its operations and business" and said shareholders would be kept updated on any further developments.

Trading in Ezion shares was voluntarily suspended in March 2019, as chairman Wang Kai Yuen and chief executive Chew Thiam Keng asked shareholders to pray for them.

Amendment note: An earlier version of this article stated that the purchase price of the Rising Phoenix was US$48 million. Ezion Holdings has since clarified that the sum is also in dispute.