ANNOUNCEMENTS IN RELATION TO RESTRUCTURING PROCEEDINGS COMMENCED BY EZRA HOLDINGS LIMITED IN THE UNITED STATES
The Board of Directors (the “Board”) of EMAS Offshore Limited (“EOL” or the “Company”, together with its subsidiaries and associated companies, the “Group”) refers to the announcement (“Ezra Chapter 11 Announcement”) released by the Company’s ultimate holding company, Ezra Holdings Limited (“Ezra”, together with its subsidiaries and associated companies, the “Ezra Group”) on 19 March 2017, where Ezra announced that it, together with certain subsidiaries of Ezra, voluntarily filed a petition for reorganisation under Chapter 11 of the United States Bankruptcy Code (“Ezra Chapter 11 Filing”) in order to obtain the protection of the United States Bankruptcy Court to facilitate the financial restructuring of the Ezra Group.
As at 30 November 2016, the Group had an aggregate amount of approximately US$170 million owing to Ezra, of which US$125 million was subject to a deferred payment over a period of three years. In addition, the Group has an aggregate of approximately US$566 million of loans owing to financial institutions (“Bank Facilities”) of which (i) an aggregate of approximately US$242 million of loans are guaranteed or secured by securities provided by Ezra and (ii) an aggregate of approximately US$193 million of loans are jointly guaranteed or secured by securities provided by Ezra and the Group (“Relevant Facilities”). The Group also has substantial charter hire liabilities valued at approximately US$231 million as at 30 November 2016, relating to charterparty agreements entered into by the Group (“Charterparty Agreements”) of which (i) an aggregate of approximately US$119 million are guaranteed solely by Ezra and (ii) an aggregate of approximately US$58 million are jointly guaranteed by Ezra and the Group. The Ezra Chapter 11 Filing may constitute events of default under the Relevant Facilities and/or the Bank Facilities and the Charterparty Agreements and the moratorium afforded under the Ezra Chapter 11 Filing does not stay claims against the Group in relation to these Relevant Facilities and/or Bank Facilities and Charterparty Agreements guaranteed or secured by Ezra. However, the Group is not aware of any demand made by financial institutions in relation to any of the Bank Facilities as a result of the Ezra Chapter 11 Filing.
Arising from the above, the Ezra Chapter 11 Filing may have a negative impact on the Group. The Company is therefore currently seeking advice on the Ezra Chapter 11 Filing, as well as assessing the impact of such filing on the Group and on the Group’s ongoing initiatives to refinance its financial obligations and liabilities and the procurement of additional working capital facilities (“Ongoing Initiatives”). The Group will work closely with its principal bankers to review all options to continue its Ongoing Initiatives. As previously disclosed by EOL in its unaudited financial information for the first quarter of financial year ended 30 November 2016 and the announcement made on 2 March 2017, in the event that these efforts do not achieve a favourable and timely outcome, the Group will be faced with a going concern issue.
Further announcements will be made by the Company and the Board via SGXNET and Newsweb as and when there are any material developments in compliance with the listing rules of the Singapore Exchange Securities Trading Limited and the Norwegian Securities Trading Act.
When in doubt as to the action they should take, shareholders and potential investors should consult their financial, tax or other advisers.
This announcement is subject to disclosure in accordance with section 5-12 of the Norwegian Securities Trading Act.
By Order of the Board
20 March 2017