Triyards down 18% amid fallout from Ezra's Chapter 11 filing

Singapore

THE knock-on effects of Ezra Holdings' quest for Chapter 11 protection with the US bankruptcy court last Sunday continue on its subsidiaries.

On Wednesday, the stock of Triyards Holdings plunged five cents or 17.5 per cent to S$0.235, after the firm announced the previous day that its financiers may seek to assert rights, including the right to demand immediate repayment and termination or withdrawal of its loans at any time.

Some 2.4 million shares changed hands on the exchange. In its filing to the bourse, it said: "The moratorium afforded under the Ezra Chapter 11 Filing does not stay claims against the group (Triyards) in relation to these existing banking facilities. The group has/will engage and work closely with its financial institutions to ensure that there is minimal or no disruption to its existing banking facilities."

Triyards is seeking advice on the Ezra Chapter 11 filing, as well as assessing the impact on the group. According to Bloomberg data, Ezra owns more than 60 per cent of Triyards.

Triyards said at this stage it is not aware of any actions its financiers will take as a result of the Chapter 11 filing. Triyards also does not have a going concern issue, it clarified.

"In the event that any material changes occur in relation to any or all of these existing banking facilities of the group, the company will review and assess its ability to continue as a going concern," it said.

As at end-November 2016, the total amount of inter-company receivables and payables owing from the Ezra Chapter 11 entities and the Emas Chiyoda Subsea Chapter 11 entities to Triyards was about US$1.4 million and US$1.6 million, respectively.

Triyards is also liable for up to US$30 million in a joint bank facility under a corporate guarantee with Ezra, and there is also an existing banking facility with US$8.5 million outstanding for which Ezra and Triyards jointly provided corporate guarantees.

OCBC investment analyst Low Pei Han is maintaining a "hold" rating on the stock with a fair value estimate of S$0.345, pending further clarity on the situation.

Another Ezra subsidiary, Emas Offshore, said on Monday it was assessing the impact of Ezra's Chapter 11 filing on the group's ongoing initiatives to refinance its financial obligations and liabilities, as well as the procurement of additional working capital facilities.

It has about US$170 million owing to Ezra and US$566 million in total bank facilities that are guaranteed or secured by securities provided by either Ezra or Ezra and the group.

It also had US$231 million charter hire liabilities as at Nov 30, which are either guaranteed solely by Ezra or jointly guaranteed by Ezra and the group. If its efforts do not work out, the company will face going concern issues, it said.