Emas Chiyoda Subsea, a subsea industry player, has filed a petition for bankruptcy protection at a U.S. court.
The company, established in early 2016 through a merger between Ezra’s Emas AMC and Chiyoda, said on Tuesday it had, together with several subsidiaries, filed voluntary petitions for reorganization under chapter 11 of the U.S. Bankruptcy Code to facilitate the company’s financial and operational restructuring.
The petitions were filed in the Southern District of Texas Bankruptcy Court.
In connection with the filing, Emas Chiyoda Subsea has received a commitment on an up to US$90 million financing facility from Chiyoda Corporation and Subsea 7.
“Subject to bankruptcy court approval, the financing will be made available to support the Company’s continuing business operations, minimize disruption to its worldwide projects and make necessary operational changes,” the company said.
“The restructuring will provide Emas Chiyoda Subsea with an opportunity to focus on strengthening its financial and operational systems, enhancing the Company’s efforts to weather the current challenges. As a major player in the subsea sector, Emas Chiyoda Subsea’ operational and financial performance is dependent on the macro outlook and expansion plans of oil majors. Whilst ECS has an order book of over US$1 billion, the commencement dates of many of these projects remain in flux, affecting utilization levels and negatively impacting financial performance,” the company said.
Emas Chiyoda Subsea added it has started a process to restructure its balance sheet and position the company for the future.
“The company believes that this court process is in the best interest of all of its stakeholders, resulting in value creation and a sustainable capital structure. This difficult but important step will provide for a transparent restructuring of the Company under the supervision of the Bankruptcy Court,” Emas Chiyoda Subsea said.