Interim judicial managers see 'reasonable' prospects of saving Swiber

Swiber Holdings' logo on its building at 12 International Business Park.
Swiber Holdings' logo on its building at 12 International Business Park.PHOTO: ST FILE

SINGAPORE - The interim judicial managers (IJMs) of debt-ridden Swiber Holdings said on Monday (Sept 5) it saw "reasonable" prospects of saving the company.

In a report filed in the High Court on Friday, the IJMs said key stakeholders, including major suppliers, vendors and creditors, have "expressed willingness to work with them to support the completion of the ongoing projects".

The prospects of saving the company hinge on the support of stakeholders and its ability to complete some US$1.67 billion worth of secured projects. This could lead to a better outcome for creditors than a winding up scenario, the report said.

The IJMs have also identified potential sources of working capital of about US$284 million to be raised for the continued operation of Swiber and its main subsidiary, Swiber Offshore Construction.

The IJMs, led by Bob Yap, head of advisory at KPMG in Singapore, also disclosed that they have so far received 24 expressions of interest, including proposals from potential investors to provide equity/debt financing, asset financing and project financing. No further details were given in the IJM's report.

The IJMs said they will evaluate the expressions of interest together with Swiber's management.

"We are hopeful that the support of the various stakeholders for Swiber to complete ongoing projects together with our proposed restructuring plan, will help turn around the situation and lead to a better outcome for all stakeholders," said Mr Yap.

The continued operation of both companies may also "prevent the potential crystallization of contingent liabilities of about US$1.23 billion in a liquidation scenario," said the IJMs.

Oilfield services group Swiber applied in July to place itself under judicial management, after initially filing for liquidation, becoming the biggest Singapore company to fall victim to the ongoing oil slump. Judicial management allows for a company to be nursed back to health under the supervision of the Singapore Court.

The IJMs believe that under their plan, there is a "reasonable prospect" of achieving one or more of the three objectives of a judicial management.

These include the survival of the company, as a whole or in part, as a going concern; the approval of a scheme of arrangement between the companies and/or their creditors; or a more advantageous realisation of assets would be effected than in a winding up.

The IJM report provides the High Court with details of the companies' cash position, information on ongoing projects and an assessment of Swiber Holdings' and Swiber Offshore Construction's (SOC) ability to generate value for one or more of the objectives of judicial management, including the rehabilitation of the companies.

The IJMs pointed out that the Swiber Group's key strengths are in the engineering and construction of upstream projects, and completing projects it had already won would be a "crucial milestone". This would be value accretive and positive for the recovery of SOC, said the statement.

The IJMs said that SOC has a potential order book of about US$608 million for projects which it has submitted bids. The key personnel of SOC are still intact and have the necessary experience and credentials to complete these projects, they added.