Ezion sheds another offshore asset in effort to reduce cash burn

Singapore’s Ezion Holdings has entered into a memorandum of agreement to dispose an offshore vessel, Teras Genesis, in an attempt to reduce cash burn and shift focus to liftboats.

Teras Genesis vessel; Source: Teras Offshore

The buyer is Astro Offshore, a company incorporated in Singapore who owns and operates a fleet of offshore support vessels. Ezion agreed to sell the vessel for cash consideration of $2.25 million.

Ezion said on Wednesday that the aggregate carrying value of the vessel as at September 30, 2019, was approximately $1.39 million. The disposal is expected to generate a gain on disposal of $858,000.

The consideration received from the disposal will be utilized to repay the secured bank loans of the group. The mortgage over the vessel will be discharged pursuant to the disposal.

According to Ezion, the disposal is in line with its plan to focus on its liftboats and reduce burn rates of the service rigs and vessels.

Ezion has already agreed for a disposal of three rigs due to the same reason. Namely, Ezion last October entered into an agreement to sell three jack-up rigs for $3. The buyer also agreed to take over Ezion’s liabilities linked to these units.