Singapore-listed oil service provider Ezra Holdings may need to consider its investments in Malaysia’s Perisai Petroleum Teknologi after the latter declared itself insolvent amid a default on $89.6 million (SGD125 million) bond, a situation it has said were due to headwinds in the oil and gas sector.
In a filing with the Singapore stock exchange, Ezra said that it “is monitoring the situation and assessing the impact on the group” and further announcements will be made in due course as and when appropriate.
Ezra, which is heavily leveraged at the moment, is Bursa Malaysia-listed Perisai’s largest shareholder with a 20.6 per cent stake through Emas Offshore Ltd and another unit that includes a joint venture.
“The offshore oil & gas industry has remained uncertain and volatile and as the market remains depressed in 2016, the Group continues to see challenging times as the demand for the Group’s offshore assets and services continue to remain low,” Ezra had said in an announcement at the stock exchange.
The announcement from Ezra follows the recent news when the Malaysian upstream oil and gas service provider Perisai declared itself insolvent following the default on the principal and interest of the $89.6 million (SGD125 million) bond issued by its subsidiary company Perisai Capital (L) Inc.
Perisai had failed when it had made a proposal to its Singapore bondholders to delay the maturity of the notes and defaulted on the October payment for the bonds which were due earlier in the month and February next year. As a result, the company triggered the Practice Note 17 (PN17) criteria of Bursa Malaysia.
In a filing at the Singapore stock exchange, Ezra said, Perisai “and its subsidiaries are currently operating under adverse financial conditions. With the current market downturn, the Group’s business has been negatively affected by market conditions in the oil & gas sector, including weak crude oil prices and slow economic growth”.
In a set of proposals, Ezra has asked to waive various financial obligations.
“The company and its subsidiaries have and are likely to continue to face strong headwinds in the foreseeable future. As part of the group’s policy, the group will reassess the value of its assets as at Aug 31, 2016, and if necessary, impair or write them down as appropriate,” it said in a filing with the Singapore stock exchange.