The offshore provider Emas Chiyoda Subsea, which is affiliate of Singaporean oilfield services company Ezra Holdings, filled for bankruptcy in Southern District of Texas Bankruptcy Court. The company ran short of cash due to a lingering downturn in the oil-and-gas market, as well as prolonged weak demand for its subsea contracting work and tightening credit conditions. Emas Chiyoda Subsea reported that its debt rose to 550 million USD and requested court permission to borrow up to 90 million USD to allow it continue its current projects with minimal disruption. The company will seek access to 55 million USD of the proposed loan at a hearing in Houston. The loan requires Emas Chiyoda to file a bankruptcy exit plan in 60 days and to have the plan confirmed by US Bankruptcy court in 120 days.
“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”, said the Emas Chiyoda’s general counsel, Stephen McGuire. “The restructuring will provide an opportunity to focus on strengthening financial and operational systems, enhancing the company’s efforts to weather the current challenges”, added he.
The bankruptcy protection lawsuit comes eight months after Emas Chiyoda Subsea teamed with India’s Larsen & Toubro in 1.6 billion USD contract with Saudi Aramco to expand the offshore Hasbah gas field.
Emas Chiyoda Subsea is a joint venture between Ezra Holdings Limited and the Chiyoda Corporation. Founded in 1992, Ezra is a leading contractor and provider of integrated offshore solutions to the oil and gas industry. The company suffered from serious debt increase and low liquidity due to prolonged crisis in the offshore sector. Emas Chiyoda’s debts include 85 million USD in unsecured claims from the DBS Bank in Singapore, nearly 15 million USD from Norway’s DNB Bank, 13 million USD from the OCBC Bank in Singapore, a disputed tax claim of 8.5 million USD with the US Internal Revenue Service and 6 million USD with Bibby Offshore.