Ezion Holdings expects to post fourth-quarter and full-year net losses on possible impairments of loans to joint ventures, the liftboat owner said in a filing to SGX before the market open on Monday.
The company pointed to its third quarter results, which showed non-current assets had risen to US$1.70 billion as of end-September, due to certain joint-venture bank loans, which increased shareholder loans to joint ventures.
“As the market conditions of the global oil and gas industry remains uncertain, the group has carried out an assessment on the recoverability of the shareholder loans to joint ventures,” it said, adding the value of the impairments wasn’t determined yet.
Ezion also said the adoption of new accounting standards on how to measure the fair value of its vessels means it expects a “significant decrease” in its net asset value.
As a business update, Ezion said that the security documents for loan agreements, which were expected to be completed by the of end 2018, were still being finalized.
“These delays have severely impacted the deployment of the vessels and the group’s operations as the group is unable to drawdown the required funds,” Ezion said.
It added that its vessel deployment plan for this year has been affected, including two liftboats being rejected by a national oil company over concerns the shortage of funds affected operations and maintenance.
A separate liftboat and one jack-up rig were also delayed as the company lacked the funded to begin modifications required by an oil major, it said.
Another jack-up rig also needs additional funding to be redeployed due to re-imposed sanctions on the country it was sent to, Ezion said.