Ezra Holdings shares plunge to record low after $239.3 mln ECS writedown

Ezra Holding shares dropped to 3.2 Singapore cents even as 190 million shares were traded on the SGX.

EMAS offshore reports full-year loss, warns of write downs, grim outlook
The SEADRILL 3, the first of four oil rigs that Keppel FELS is building for the same customer, is seen in Singapore in this April 21, 2006 file photo. REUTERS

The shares in Ezra Holding, which said last Friday it was writing down S$239.3 million (US$170 million), plunged a whopping 30 percent on Monday. Ezra shares were expected to take a hit as trading resumed on Monday but the scrip's fall to record lows heightened the market's aggravated concern over the profitability of Singapore's offshore and oil and gas companies.

The shares dropped to 3.2 Singapore cents even as 190 million shares were traded on the SGX. The transaction volume was more than six times the share's 30-day average trading volume.

Friday's announcement of the massive write-down came even as speculation was rife that Ezra would be able to rope in a white knight investor to prop up its subsea joint venture Emas Chiyoda Subsea (ECS), in which Ezra holds 40 percent shareholding interest.

Ezra said the write-down comprised investment in shareholders' loans and inter-company balances owed by ECS, according to the Business Times.

Earlier, Ezra's Japanese partners in the ECS joint venture, Chiyoda Corporation and Nippon Yusen Kabushiki Kaisha (NYK Line), had said they were writing down 51 billion yen (S$638 million) on their stakes in the subsea JV.

Ezra, which is among the marine sector companies in Singapore troubled by the oil market downturn, owes over US$1 billion of secured and unsecured debt repayable in one year or less, BT reported.

On Friday, Ezra said it was "in regular discussions with a number of its substantial creditors and has had dialogues with its key stakeholders, including financial lenders and trade creditors."

Singapore's offshore companies like Keppel, Vallianz and EMAS have all reported earnings pain and job restructuring in the aftermath of a trebled oil market.