Ezion Holdings Ltd. was sued by a partner which accused the Singapore-based offshore service provider of a conspiracy to induce an A.P. Moeller-Maersk A/S unit to breach charter agreements. Ezion’s stock fell.
Ezion created the impression Atlantic Marine Services BV, which it had agreed to charter oil rigs with to Maersk Oil, was in financial trouble, the Amsterdam-based company claimed in a lawsuit filed last month in the Singapore High Court. A closed hearing is scheduled for June 2.
Atlantic Marine said in the suit it agreed to pay inflated charter rates to Ezion for the rig services provided to Maersk Oil to help the Singapore company secure bigger loans. The claims are frivolous and without merit, Ezion’s lawyer Peter Doraisamy said. Maersk Oil, which isn’t a party in the lawsuit, said it has terminated its contract with Atlantic Marine for its failure to meet contractual obligations.
Ezion is in discussions with a European oil major “on how to better serve its requirement,” the company said in response to queries from the stock exchange on Monday, without naming Maersk. The outcome of the lawsuit isn’t expected to have a material impact on its earnings per share this year, Ezion said.
Muralli Rajaram, a lawyer representing Atlantic Marine, declined to comment.
Ezion fell 4.6 percent to S$1.13 at the close in Singapore, the lowest since April 10. About S$39 million of the shares changed hands, the third-most actively-traded stock by value in the city-state.
Atlantic Marine’s lawsuit “could potentially be viewed as an attempt to save its position as a Maersk Oil middleman,” RHB analyst Lee Yue Jer said in a research note. “The market has taken a knee-jerk negative reaction.” Lee kept his buy rating and target price of S$2.10 on Ezion.
Ezion, which last week posted a 9.4 percent fall in first-quarter net income to $41 million, described the operating environment as “challenging” after a drastic drop in oil prices.
The case is Atlantic Marine Services BV v Ezion Holdings Ltd., S401/2015. Singapore High Court.