Swiber reprimanded over 2014 announcement of $989m project

A view of the company logo of oil and gas services firm Swiber Holdings is seen on its building in Singapore on Aug 8, 2016.
A view of the company logo of oil and gas services firm Swiber Holdings is seen on its building in Singapore on Aug 8, 2016. PHOTO: AFP

Singapore - Swiber Holdings has received a reprimand from the Singapore Exchange over an announcement it made in Dec 2014 on the award of a US$710 million (S$989 million) project in West Africa.

The SGX said on Monday that Swiber, which is now under judicial management, failed to be fair and balanced in the disclosure, because it had not yet signed a contract document for the deal when it made the announcement.

Yet, the SGX said, Swiber included the value of the deal into its total orderbook, amounting to US$1.03 billion at the time.

Swiber then gave no updates on the West African works until July 8, this year, when it told the market that the project had not been able to progress in accordance with its original schedule due to persistent weakness in the oil and gas sector.

Swiber added that the firm and its subsidiaries had not recognised any revenue from the project.

The SGX then issued queries to Swiber, which provided a copy of the Letter of Intent (LOI) signed between its unit, Swiber Offshore Construction (SOC), and the client.

The LOI stated, among other things, that a contract document would be formalised in due course and that the contract price of US$710 million was an indicative one which would be reviewed at a later stage of the project.

And so, the SGX said, the original Dec 2014 announcement was not balanced and fair, "as Swiber presented favourable possibilities as certain, or as more probable than is actually the case".

In particular, the SGX noted, Swiber did not disclose that based on the LOI, the project was subjected to the formalisation of a contract in due course between SOC and the client, and the determination of the final contract price.

"SGX is of the view that the announcement failed to provide investors, including shareholders and bondholders, with sufficient information to enable them to have a proper understanding of the impact of a major project award on the group," the bourse operator said.

The SGX said it has referred the case to the relevant authorities.