L&T relaxed about Emas Chiyoda bankruptcy

Vol 20, PW 15 (20 Apr 17) News in Brief

You'd think Larsen & Toubro would be worried sick after Emas Chiyoda Subsea - its 40% partner in a massive $1.6bn contract off Saudi Arabia - filed for voluntary re-organisation under Chapter 11 of the US bankruptcy code.

But an L&T source, speaking on condition of anonymity, sees no threat to the contract awarded by Saudi Aramco in July 2016 for the Phase-2 development of the Hasbah gasfield. "The project should go ahead," he says.

"Chapter 11 deals with the financial re-organisation of a company while keeping its business alive." Officially, L&T refuses to comment. "This matter is sub judice in US courts and we recommend against any story," L&T said in an email to this report.

Emas Chiyoda announced on February 28 it is seeking protection from creditors under Chapter 11 in the Texas bankruptcy court. Chapter 11 proceedings were also filed on March 18 by Singapore-listed Ezra Holdings (which holds 50% in Emas Chiyoda) in the New York bankruptcy court, which will hear the petition May 4.

"The turmoil in the (oil) industry is hurting us," a Chiyoda source tells this report.