Offshore energy company Emas Chiyoda Subsea filed for bankruptcy protection in Houston as it seeks to survive the oil downturn and reduce its mounting debts.
Emas Chiyoda’s roughly 200 employees in Houston — down from 400 two years ago — have expressed concerns about the future of their jobs as the offshore engineering and equipment business defaulted on multiple payments worldwide starting late last year. The business is a joint venture between Singapore-based Ezra Holdings and Japan’s Chiyoda Corp. and NYK Lines.
In its bankruptcy filing, Emas Chiyoda said it’s accepting a loan of up to $90 million from Chiyoda and United Kingdom-based Subsea 7 with the requirement of filing a bankruptcy exit plan within 60 days. The goal is for the loan to keep the business afloat as it undergoes restructuring.
In a prepared statement, Emas Chiyoda said the bankruptcy filing is the best process to restructure its balance sheet and position the company for the future. Trading on Ezra Holdings’ stock in Singapore was temporarily halted.
Subsea 7 is rumored to buy out NYK’s 25 percent stake in Emas Chiyoda, but Subsea 7 spokeswoman Isabel Green said only the loan is concrete at this point. “Anything else is speculation. We do not comment on speculation or rumour,” Green added.
Emas Chiyoda’s debts include $85 million in unsecured claims from the DBS Bank in Singapore; nearly $15 million from Norway’s DNB Bank; $13 million from the OCBC Bank in Singapore; a disputed tax claim of $8.5 million with the U.S. Internal Revenue Service; and $6 million with U.K.-based Bibby Offshore.