ECS and 14 of its subsidiaries have voluntarily filed petitions for reorganisation in the Southern District of Texas Bankruptcy Court on 28 February. The subsea services firm is jointly owned by Ezra, Chiyoda Corporation and Nippon Yusen Kaisha (NYK).
“The restructuring will provide ECS with an opportunity to focus on strengthening its financial and operational systems, enhancing the company’s efforts to weather the current challenges,” ECS said in a statement.
“Whilst ECS has an orderbook of over $1bn, the commencement dates of many of these projects remain in flux, affecting utilisation levels and negatively impacting financial performance. To address these challenges, ECS has commenced a process to restructure its balance sheet and position the company for the future,” it said.
In connection with the filing, ECS has received a commitment of up to $90m in financing facility from Chiyoda Corporation and Subsea 7. The financing, subject to bankruptcy court approval, will be made available to support ECS in continuing its business operations and minimising disruption to its worldwide projects.
EMAS-AMC AS, one of the subsidiaries of ECS, has also filed for bankruptcy in Norway after facing difficulties in fulfilling its financial obligations. The bankruptcy proceedings for for EMAS-AMC were opened at the Oslo Bankruptcy Court on Tuesday.
EMAS-AMC had failed to pay the charter fees for the vessel Lewek Inspector, owned by Forland Subsea. Ezra, which acts as guarantor for the vessel charter contract, is now facing a claim of approximately $3.1m from solicitors of Forland Subsea.
EMAS-AMC has also been served a notice of termination relating to the charter of another vessel Lewek Connector owned by Ocean Yield over default payment of the bareboat charter for the months of December 2016 and January 2017.
In another case, Bibby Offshore filed for arbitration against ECS in January, saying it is owed $14.7m from $18.1m of contracts performed in Trinidad last year.