Energy services firm Swiber files to wind up

Oil and gas contractor Swiber Holdings has filed a winding-up application, and its directors have resigned to pursue their own interests.
Oil and gas contractor Swiber Holdings has filed a winding-up application, and its directors have resigned to pursue their own interests.ST PHOTO: MARCUS TAN

The oil price collapse claimed its biggest local casualty yesterday when energy services firm Swiber Holdings filed an application to be wound up and liquidated.

While the loss-making firm did not cite specific reasons behind the move, it said in a separate announcement that it has received several letters of demand amounting to US$25.9 million (S$35 million). At the same time, three executive directors - vice-chairman Francis Wong; Mr Leonard Tay, who is also the chief financial officer; and Mr Nitish Gupta - have resigned.

The reverberations from the liquidation were felt immediately in the broader stock market, with counters in the oil and gas industry taking a beating yesterday. Shares of DBS Group Holdings, a key lender to Swiber, fell 2.3 per cent to $15.88.

In a statement last night, DBS said it has a total exposure of about $700 million to the Swiber group.

This exposure comprises loans, bonds and off-balance sheet items.

DBS expects to recover half of the amount as some of the debts were backed by collaterals.

The bank said it will provide fully for the anticipated shortfall by tapping its surplus general allowances - a kind of rainy-day account to deal with doubtful debts.

The Singapore Exchange (SGX) said it is also investigating potential lapses in disclosure at Swiber.

"We have been closely monitoring the situation at Swiber and will be undertaking a thorough investigation into the developments there," said SGX chief regulatory officer Tan Boon Gin. "The company and relevant individuals should expect us to take action if any breach of the listing rules is found."

The sudden fall from grace of Swiber, an energy services company that operates 13 construction vessels with about 2,700 employees, has shocked the market, although the warning lights have been flashing for some time, particularly as the global offshore and marine industry continues to be hit hard by the slump in oil prices.

The winding-up application will be heard in court on Aug 19.

Mr Cameron Lindsay Duncan and Ms Muk Siew Peng of KordaMentha have been appointed joint provisional liquidators.

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A version of this article appeared in the print edition of The Straits Times on July 29, 2016, with the headline 'Energy services firm Swiber files to wind up'. Print Edition | Subscribe