Cash-strapped liftboat specialist Ezion Holdings reported a net loss for the first quarter of $12.8 million on the back of lower revenue. The company’s revenue for the quarter was $28 million, down from $37 million in the corresponding quarter a year ago.

Ezion, operating a fleet of liftboat servicing the offshore energy industry, identified three main reasons for the revenue fall.

First, the Singapore-based company cited a drop in utilization rates of liftboats as a result of continued delays in re-deployment of the Group’s assets due to working capital constraints pending finalization of the additional revolving credit facilities.

Furthermore, the company has cited the credit faced by shipyards, equipment suppliers and service providers used by the group.

“The tighter credit terms imposed by these vendors coupled with the inability of the Group to drawdown the required funds from its secured lenders has severely affected the Group’s ability to operate, maintain and deploy its vessels,” Ezion said.

On top of the factors mentioned, Ezion has also quoted the overall reduction in charter rates across the Group’s fleet of vessels, as the reason behind the drop in revenue.

As at March 31, 2019, Ezion’s Current Assets amounted to US$253.2 million. As at the same date, the group had total liabilities of almost $1.6 billion.

“The Group will endeavor to engage closely with the secured lenders to complete the required documentation in order to expedite the drawdown of the additional revolving credit facilities from the secured lenders to deploy the Group’s vessels back to work,” Ezion said.

Related: Yinson moves to acquire Singapore’s Ezion

Ezion also reminded that “the Refinancing Exercise” of the group was completed in 2018, “with the earliest bullet repayment on the Group’s borrowings due only in November 2023. This has provided the Group with a runway to reduce its debt to a sustainable level and achieve a sustainable capital structure.”

Giving its take on the overall offshore market conditions Ezion said: “There has not been any significant improvement in the overall market conditions for the offshore oil and gas industries. The continued uncertainty in the oil prices that has affected the Group’s clients coupled with the persistent oversupply of certain marine assets like tugs, barges, workboats, and jack-ups continues to present challenges to the Group.

“The availability of funds from the lenders remains crucial to the Group’s ability to put its mainly production-related asset into deployment to meet the requirements of its clients and the management is still working intimately with the secured lenders on the disbursement of the required funds.”

Worth noting, Ezion in April entered into a conditional agreement with Malaysia’s FPSO specialist Yinson. Under the agreement, Yinson would acquire the benefits and rights in respect of up to $916.0 million of Ezion’s debt in exchange for becoming new majority shareholder with at 70% in Ezion.

Ezion has said that the entrance of Yinson as Ezion’s new majority shareholder would enable the Group to recapitalize its balance sheet, reduce its debts and restore its normal operations to meet the demand from its clients for its fleet of Liftboats. Ezion also expects to benefit from Yinson’s “extensive network of clientele and service providers.”

In an update on Wednesday, Ezion said that Yinson was still in negotiations with the designated lenders over the above transaction.

Offshore Energy Today Staff

Spotted a typo? Have something more to add to the story? Maybe a nice photo? Contact our editorial team via email.

Offshore Energy Today, established in 2010, is read by over 10,000 industry professionals daily. We had nearly 9 million page views in 2018, with 2.4 million new users. This makes us one of the world’s most attractive online platforms in the space of offshore oil and gas and allows our partners to get maximum exposure for their online campaigns. 

If you’re interested in showcasing your company, product or technology on Offshore Energy Today contact our marketing manager Mirza Duran for advertising options.