* Oil & gas shares fall as much as 1 pct, Ezra shares
* Banks have stepped up provisions for marine sector loans
* SGX says to aid Ezra noteholders
(Adds analyst and lawyer comments, Ezra bonds, context)
By Aradhana Aravindan and Anshuman Daga
SINGAPORE, March 20 Oilfield services provider
Ezra Holdings Ltd's decision to file for U.S.
bankruptcy protection gave investors another cause for concern
on Monday as its downfall added to troubles in Singapore's
offshore marine sector.
Ezra is one of several marine firms hit by a downturn in oil
prices since 2014 that has forced many to restructure debt and
cut costs in a battle to stay afloat.
Industry peers Swiber Holdings Ltd and Swissco
Holdings Ltd have already sought refuge in court,
while auditors have questioned the future of Nam Cheong Ltd
"No, (the pain) is not over yet," said CIMB analyst Lim Siew
Khee, who expects one to two more firms to default on debt in
the next two years.
In response, Singaporean banks - including Ezra creditors
DBS Group Holdings Ltd and Oversea-Chinese Banking
Corp - have been preparing for casualties.
"We have been stress testing this sector since the third
quarter of 2015, and in the process identified a list of
customers that could be negatively impacted," OCBC said in a
statement on Monday.
OCBC said it had created specific provisions and additional
general provisions for potential further deterioration in its
oil and gas-related portfolio. It declined to identify specific
DBS in a statement said, "Our exposures to Ezra Holdings
were moved to non-performing in the third quarter, and suitable
provisions have been made."
The Ezra news sent Singapore's oil and gas share index down
as much as 1 percent on Monday before it recovered some ground.
Ezra, whose debt includes $272 million in unsecured loans
owed to DBS and $184 million to OCBC, filed for U.S. Chapter 11
on Saturday along with two affiliates, saying it was unable to
pay debts on time.
The company has been flagging difficulties for the past few
months. Its subsea services affiliate Emas Chiyoda Subsea Ltd
filed for bankruptcy earlier.
"(Ezra is) a sizeable company with a huge amount of assets
and liabilities," said Terence Lin, assistant director of bonds
and portfolio management at online financial products
distributor iFAST Corp. "At this point in time we have no
knowledge of how much of the assets could be written down."
Ezra's bankruptcy filing showed at least a dozen creditors
have considered taking action against Ezra and its affiliates.
"The group needs to seek legal shelter to pre-empt
inundations of litigations from its debtors," said Robson Lee, a
Singapore-based partner at Gibson, Dunn & Crutcher LLP.
When a company files for Chapter 11, it can apply to the
court to reject highly burdensome on-going contracts that do not
fit into the debtor's long-term business plans and which cannot
be restructured to do so - something typically not possible
under current Singapore law, Lee said.
Ezra's filing for bankruptcy protection would be another
blow to bondholders in Singapore where several firms, including
shipping trust Rickmers Maritime and Perisai Petroleum
Teknologi Bhd, are trying to restructure debt.
In contrast to European and U.S. bond markets, which are
dominated by institutions, Singapore has a large base of
individual investors. These individuals have increasingly been
teaming up to seek better terms in restructurings.
The Singapore Exchange said it would aid the 373 holders of
Ezra's S$150 million ($107 million) notes due 2018
, which have been trading at distressed levels
since December. Ezra said it would meet noteholders as soon as
Trading of shares in Ezra, which has a market value of $23
million, was suspended on Monday. The stock has lost $1.5
billion in value since peaking in 2007. Trading of shares of
shipbuilder Triyards Holdings Ltd, 60 percent owned by
Ezra, was also halted.
Nam Cheong stock was down 26 percent.
($1 = 1.3975 Singapore dollars)
(Reporting by Aradhana Aravindan and Anshuman Daga; Additional
reporting by Umesh Desai; Editing by Christopher Cushing)