Feb 28 (Reuters) – A subsea and offshore contractor affiliate of Ezra Holdings Ltd, a struggling Singaporean oilfield services firm, filed for U.S. bankruptcy as it ran short of cash due to a lingering downturn in the oil-and-gas industry.
The affiliate, Emas Chiyoda Subsea Ltd, said in court papers filed in Houston that the company was suffering from weak demand for its subsea contracting work and tightening credit conditions.
Ezra has said it may have to take a $170 million writedown on the value of its investment in Emas Chiyoda.
Oilfield service firms have been turning to bankruptcy to shed debt and raise cash after years of hunkering down after energy prices tumbled from the recent peak in 2014.
Emas Chiyoda’s bankruptcy comes eight months after it teamed up with India’s Larsen & Toubro Ltd to land a $1.6 billion contract with Saudi Aramco, Saudi Arabia’s state-owned oil company, to expand the offshore Hasbah gas field.
Onshore work has begun and the offshore phase of the Hasbah project will begin later this year, said Emas Chiyoda’s general counsel, Stephen McGuire, in a court filing.
The company, which is based in Birmingham, United Kingdom, said it had about $550 million in debt.
“As a result of the deteriorating market conditions in the oil and gas sector coupled with the company’s financial difficulties, the company’s lenders have frozen borrowing availability,” McGuire said in a court filing.
The company has requested court permission to borrow up to $90 million to allow it continue its current projects with minimal disruption. The company will seek access to $55 million of the proposed loan at a hearing on Wednesday in Houston.
The proposed loan is being extended by Chiyoda Corp of Japan and Subsea 7 S.A. of the United Kingdom, according to court documents.
The loan requires Emas Chiyoda to file a bankruptcy exit plan in 60 days and to have the plan confirmed by U.S. Bankruptcy Judge Marvin Isgur, who was assigned to the case, in 120 days.
Ezra of Singapore owns 40 percent of Emas Chiyoda, Chiyoda owns 35 percent and Nippon Yusen KK of Japan owns the remainder, according to court documents.
A creditor of a subsidiary of Emas Chiyoda filed a court petition this month to liquidate the unit. (Reporting by Tom Hals in Wilmington, Delaware; Editing by Noeleen Walder, Bernard Orr)
COPENHAGEN, April 15 (Reuters) – Shipping company Maersk has not made any deployment changes after a Portuguese-flagged container ship was seized by Iran in the Strait of Hormuz on Saturday, the Danish company said on Monday. “We find recent...
WASHINGTON, April 15 (Reuters) – The FBI has opened a federal criminal investigation into the deadly collapse of a Baltimore bridge last month when a ship crashed into one of its supports,...
By Daryna Krasnolutska (Bloomberg) Russia and Ukraine may have struggled to shift things significantly on the battlefield for more than 16 months, but a new phase of the war is moving...
April 14, 2024
Total Views: 2113
Why Join the gCaptain Club?
Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.