Ezra files for Chapter 11 bankruptcy in US
The likes of DBS, OCBC and UOB all have claims against the offshore marine giants
Offshore marine giant Ezra Holdings has filed for Chapter 11 bankruptcy protection in the US, amid the most crushing oil industry downturn since the 1980s.
Ezra, which rode on debt-fuelled growth until oil prices crashed in 2014, has been trying to restructure so the moratorium on creditors' claims afforded under Chapter 11 will give it more headroom and protect it from "hostile actions" that could diminish the group's value, it said.
Although Ezra's principal assets are located in Singapore, it listed a New York address as its main place of business in its court petition filed on Saturday, together with two subsidiaries, Emas IT Solutions and Ezra Marine Services.
The bankruptcy filings will affect banks with exposure to the companies' debt.
A list of creditors showed that DBS Bank had unsecured claims of US$281 million (S$394 million) and secured claims of US$47 million on Ezra's holding company and its two units.
OCBC Bank is owed unsecured claims of US$207 million and secured claims of US$73 million.
United Overseas Bank had US$23 million unsecured claims and US$10 million in secured ones.
A DBS spokesman said: "Our exposures to Ezra were moved to non-performing in the third quarter, and suitable provisions have been made."
Our exposures to Ezra were moved to non-performing in the third quarter, and suitable provisions have been madeDBS spokesman
But it remains to be seen if the banks have taken sufficient discounts on the recoverable values of some collateralised loans.
Even after multiple efforts to deleverage, including rights issues and the divestment of its subsea business to Japanese partners, Ezra's consolidated group liabilities remain painfully high.
Ezra shares traded at an all-time low of 1.1 cents last Wednesday before trading was halted.
The counter is likely to be suspended from today.
The market is also bracing for the impact on Ezra's two listed subsidiaries - Emas Offshore which has had trading suspended since March 6, and yard-operating unit Triyards.
Triyards has guaranteed part of a joint bank facility with Ezra, and could pay up to US$30 million if Ezra defaults.
Ezra also has $150 million unsecured bonds maturing next year, split among at least 373 different investors.