Singapore debt wall fuels concerns as Ezra stumbles

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Singapore debt wall fuels concerns as Ezra stumbles

The company's stock lost a fifth of its value in early March after it disclosed it had provided guarantees on almost $900 million in liabilities and loans of Emas Chiyoda Subsea, an affiliate the also filed for USA bankruptcy.

CIMB head of research Lim Siew Khee said it was likely that the banks' exposure to Ezra exceeds their exposure to Swiber Holdings, which filed for judicial management here in July previous year.

Ezra shares last traded on March 15 at an all-time low of 1.1 cents, down 77.6 per cent this year, while Triyards shares finished at 28.5 cents last Friday, dropping 1.7 per cent from Thursday's close.

The company's stock lost a fifth of its value in early March after it disclosed it had provided guarantees on almost $900 million in liabilities and loans of Emas Chiyoda Subsea, an affiliate the also filed for US bankruptcy.

According to the court papers, Ezra's largest unsecured creditors include all three Singapore banks: DBS Bank with claims totalling US$281.4 million, OCBC Bank at around US$207 million, and United Overseas Bank (UOB) with US$22.8 million.

"(Ezra is) a sizeable company with a huge amount of assets and liabilities", said Terence Lin, assistant director of bonds and portfolio management at online financial products distributor iFAST Corp. OCBC and UOB said they have made provisions for vulnerable accounts in the sector.

DBS in a statement said, "Our exposures to Ezra Holdings were moved to non-performing in the third quarter, and suitable provisions have been made". "At this point in time we have no knowledge of how much of the assets could be written down".

In a separate announcement on Sunday, the Singapore Exchange said it has asked Ezra to convene a meeting with note holders and that the company is agreeable.

"I expect the recovery prospect for Ezra's bondholders could be pennies on the [US] dollar under the USA bankruptcy process", said Kurt Metzger, a Singapore-based director at GEM Advisory, a debt-restructuring consulting firm.

In contrast to European and US bond markets, which are dominated by institutions, Singapore has a large base of individual investors.

Ezra pointed out that holders of a SGD150m 4.875% notes due 2018 may seek to assert rights in the Chapter 11 case. Shares of the group's other Singapore-listed entity, Emas Offshore, have been in suspension since earlier this month, last trading at five cents on March 3.

Nam Cheong stock was down 26 percent.

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