Emas Chiyoda Subsea (ECS) has filed voluntary petitions for reorganisation under chapter 11 of the U.S. Bankruptcy Code to facilitate the company’s financial and operational restructuring.
In connection with the filing, ECS 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, minimise disruption to its projects and make necessary operational changes.
According to the company, it has an order book of over US$1 billion, however, the start dates of many of the projects remain in flux, affecting utilisation levels and negatively impacting financial performance.
“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,” ECS said in a press release.
Japan’s ECS player Chiyoda and Ezra’s subsea service business EMAS AMC launched a 50:50 joint venture Emas Chiyoda Subsea in April last year, following a binding memorandum of understanding in August 2015.